Alter NRG Corp. has proposed a coal-to-liquids (CTL) project to develop its coal reserves in the Fox Creek area of Alberta into diesel fuel and naphtha. The company holds the lease to four crown coal resources north of Fox Creek township, which is located midway between Edmonton and Grande Prairie. The facility would be Canada's first CTL plant.

The project would entail mining approximately 301 million tonnes of coal reserve in two blocks using surface mining technology and producing high-quality diesel and naphtha via gasification and other processes. The gasification process also would produce a relatively pure (95%+) stream of carbon dioxide, which would be sequestered for use in enhanced oil recovery.

According Alter NRG's July 21, 2008, Public Disclosure Document, the gasifier would convert solid coal feedstock into of synthetic gas (syngas). Using established, decades-old CTL technology, the facility would process the syngas into liquids--primarily low-sulfur, high-cetane diesel but also naphtha. The CTL plant would process approximately 27,000 tonnes per day of coal and would produce 33,0000 b/d of diesel and 7,000 b/d of naphtha. In addition, it would produce 23,000 tonnes per day of carbon dioxide.

Engineering and environmental studies are planned to be carried out through 2009 and will form the basis of the environmental impact assessment for the project. Alter expects to submit the project regulatory application in late 2009, and the regulatory review period is expected to last 18 months. The company anticipates beginning construction after receiving all regulatory approvals—likely in 2011. It plans to begin mining operations by the fall of 2013; This would pre-build coal supply for startup of the CTL plant in early 2014.

Alter NRG launched a strategic partner selection process in early 2008, and it expects to provide further details on development and financing plans when the process concludes later in the year.