Rentech Signs MOU for Synthetic Fuel With 13 Air Carriers

Rentech, Inc. (NYSE AMEX: RTK) has signed a Memorandum of Understanding (MOU) with thirteen domestic and international air carriers that is intended to serve as a framework for future supply agreements for synthetic jet fuel from Rentech’s proposed facility in Adams County, Mississippi (Natchez Project).

The fuel would be made from coal and petroleum coke, a refinery waste byproduct. However, Rentech said the overall carbon footprint of the fuel will be lower, because carbon dioxide will be captured in the production process and piped to Texas where it will be injected into oil wells. 

Rentech also said its synthetic fuel burns cleaner than traditional jet fuel.

The non-binding MOU signed by Rentech and Air Canada (AIDIF.PK), AirTran Airways (NYSE: AAI), American Airlines (NYSE: AMR), Atlas Air (Nasdaq: AAWW), Delta Air Lines (NYSE: DAL), FedEx Express (NYSE: FDX), JetBlue Airways (Nasdaq: JBLU), Lufthansa German Airlines (DLAKY.PK), Mexicana Airlines, Polar Air Cargo, United Airlines, UPS Airlines (NYSE: UPS) and US Airways (NYE: LCC) includes terms that are anticipated to serve as the basis of a possible definitive purchase agreement by these carriers for the Natchez Project’s entire synthetic jet fuel production of approximately 250 million gallons per year.

Using Rentech’s patented and proprietary synthetic fuels technology based on Fischer-Tropsch chemistry, the Natchez Project as currently contemplated would produce approximately 400 million gallons per year of synthetic fuels and chemicals and over 120 megawatts (MW) of power from fossil fuel feedstocks, with the possible integration of renewable feedstocks processed with Rentech’s biomass gasification technologies.

Rentech has contracted to sell all of the carbon dioxide to be captured at this proposed facility to Denbury Onshore, LLC, a wholly owned subsidiary of Denbury Resources Inc. (“enbury). Carbon dioxide purchased under the long-term contract would be used for enhanced oil recovery to produce otherwise unrecoverable oil at Denbury’s Cranfield oil field in Southwest Mississippi as well as at the company’s oil fields within the greater Gulf Coast area.

The Cranfield oil field is currently hosting a U.S. Department of Energy (DOE)-sponsored carbon dioxide sequestration project that is the first in the nation to inject more than 1 million tons of carbon dioxide into an underground rock formation followed by additional injections into the saline portion of the reservoir, more than 10,000 feet below the surface.

Rentech said the sequestration of carbon dioxide captured at the Natchez facility would enable the fuels produced at the facility to have a life-cycle carbon footprint lower than that of petroleum-derived fuels, as concluded in a study conducted by the DOE National Energy Technology Laboratory. The DOE study is accessible at www.rentechinc.com/publications.php.

Rentech owns an approximately 450-acre property located adjacent to the Mississippi River near Natchez, Mississippi, which is the intended site of this facility. The site has access to multiple feedstocks and product distribution channels including rail, pipeline, barge and roads. Feasibility engineering for the Natchez Project has been completed by WorleyParsons.

A recent economic impact study completed by Alcorn State University
concluded that the Natchez Project would create over 2,100 direct jobs
and over 3,400 indirect jobs during the project’s construction phase.
Once operational, the facility is expected to create over 400 high
paying direct jobs and over 3,200 indirect jobs according to the study.

In addition to converting fossil fuels into synthetic gas, Rentech’ SilvaGas biomass gasification process also can convert multiple biomass feedstocks into synthesis gas (syngas) for production of renewable fuels and power. 

Final product upgrading is provided under an alliance with UOP, a Honeywell company (NYSE: HON). Rentech develops projects and licenses these technologies for application in synthetic fuels and power facilities worldwide.

In August, Rentech announced an agreement to sell synthetic diesel for operating ground equipment to eight air carriers at Los Angeles International Airport.

Website: http://www.rentechinc.com     
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