SunCoke works on sales from coke/power project in Kentucky

SunCoke Energy (NYSE: SXC) said in a March 11 investor presentation that it is still talking with potential customers for the output of a new coke plant it has been permitting lately near Ashland, Ky., on the Ohio River.

The proposed new coke plant is expected to have 120 ovens and annual coke production capacity of 660,000 tons and about 60 MW of power generation using waste heat from the coking process. The company is targeting commitments for 60%-70% of the new plant’s capacity under 7-10 year terms. The company is open to selling the remaining coke capacity via the merchant market.

The site has good inbound and outbound logistics, the company noted. The modular design enables future expansion. The plant would have improved coke yields due to better coal/coke handling and oven design/control. The projected capital expenditure is expected at $570-$670 per ton. By contrast, the relatively new Middletown coke plant in Ohio was at $745 per ton. The total capital expenditures for this new project would be $375m-$440m.

SunCoke hopes to have final permitting for the South Shore project done in the second quarter of this year, with the earliest construction start in the fourth quarter of this year, with a first coke delivery in the first quarter of 2017.

A big boost for the South Shore project would be the possible closures of older coke batteries around the country. SunCoke noted that recent coke battery closures include ArcelorMittal Dofasco in Ontario, Canada, and at U.S. Steel’s Gary Works in Indiana, representing about 1 million tons of annual coke production.

The proposed new coke plant project will be located on US Route 23 between Johnson Lane and KY Route 2538, two miles east of South Shore in Greenup County, Ky. The company has been working with PJM Interconnection on issues with interconnecting the power part of the project to the grid. The Kentucky Department for Environmental Protection in December 2013 released for comment a draft air permit for SunCoke Energy South Shore LLC for the Greenup County project. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.