Alter NRG Corp. has filed a Public Disclosure Document outlining
further project details on the proposed development (the "Project") of Alter
NRG's coal reserves in the Fox Creek Area of Alberta into diesel fuel and
The company is advancing Canada's first Coal to Liquids
("CTL") with carbon dioxide ("CO(2)") capture Project that will provide a
clean energy solution for alternative oil production and will use proven
processes that have been in commercial operation worldwide for more than
The Alberta Energy Research Institute has stated: "Gasification is, by
far, the cleanest coal/coke conversion technology", and combined with the
planned carbon dioxide capture for use in enhanced oil recovery, the Company
believes this Project is an environmentally attractive energy solution for the
province. The Company has initiated the regulatory process and a strategic
partner selection process and the Project is expected to be operational as
early as 2014.
"By filing this Public Disclosure Document, we take an important step
toward making this initiative a reality," said Mark Montemurro, President and
CEO of Alter NRG. "Alter NRG is concerned about reducing the energy industry's
carbon footprint. As the first coal to liquids project in Canada, the Project
will be a significant, long-term contributor to Alberta's economy as well as
set a precedent for clean energy solutions."
Further details on the Project are outlined below and a copy of the
Public Disclosure Document in its entirety can be found on the Alter NRG
website at www.alterNRG.ca or on SEDAR at www.sedar.com.
The Project will involve the extraction of Alter NRG's Fox Creek coal
resource and through gasification and other processes will produce diesel fuel
and naphtha. Alter NRG's coal reserve contains enough coal to produce
40,000 bbls/d of liquid fuels, such as diesel, for over 50 years.
Alter NRG holds the lease to four crown coal resources located to the
north of Fox Creek township. The Project is located approximately 27 km
northeast of the Town of Fox Creek, Alberta, approximately midway between
Edmonton and Grande Prairie. The Company has ownership of 468 million tonnes
of proven plus probable coal reserves and 876 million tonnes of coal resource
(both reports have been previously released on December 17, 2007 and are filed
on SEDAR). The Company proposes to mine two blocks of Alter NRG's coal
(approximately 301 million tonnes of coal reserve) using established surface
mining technology, and then through commercially proven gasification and other
processes, to produce high quality diesel fuel and naphtha.
Alter NRG anticipates that capital investment for a 40,000 bbls/d Project
will be approximately $4.5 billion (2007 dollars) with an eventual operational
workforce of 400 or more full time jobs, excluding added employment in support
services. Alter NRG intends to develop the project in at least two stages,
with the first stage potentially producing upwards of 20,000 bbls/d. Alter NRG
believes the Project will have a significant long term positive effect on the
local, regional and provincial economies. The capital cost and mine-life have
been provided for the purpose of the public disclosure document and a
feasibility study has not been completed and there is not yet certainty that
proposed operations will be economically viable.
Alter NRG's Fox Creek coal asset was partly chosen for its proximity to
infrastructure and mature oil fields that would benefit from enhanced oil
recovery (EOR) by the injection of CO(2). The Project intends to seek sales
opportunities for produced CO(2) into the anticipated EOR market. In the event
that not all CO(2) can be disposed of in this way, the project plans to
sequester remaining CO(2) in deep saline aquifers or in depleted oil or gas
pools. More than 85% of the CO(2) produced in the proposed project will be
captured for sequestration.
The coal can be mined at a rate of 9.2 million for over 50 years to
produce 40,000 bbls/day. The gasifier will convert solid coal feedstock into
synthesis gas (primarily a mixture of carbon monoxide and hydrogen, commonly
referred to as "syngas"). The syngas will be further processed into liquids,
with a planned emphasis on low sulfur, high-cetane diesel, but also
co-produce naphtha. This part of the Project will also use established
technology which is commonly referred to as "Coal to Liquids", or "CTL", and
has been commercially employed in this way for more than 30 years.
Gasification allows for the removal of harmful contaminants from the
coal, which makes this an environmentally responsible process for producing
The markets for the key outputs - diesel, naphtha and CO(2), located
within the province of Alberta, are well developed, and are expected to
experience continued growth.
--The high-cetane, low-sulfur diesel provides Edmonton area or other upgraders and refineries with an opportunity to blend the Fox Creek diesel product with lower quality diesel thereby increasing the volume and average value of diesel products.
-- Naphtha is used in the oil sands industry as a diluent for bitumen. Addition of diluent assists in making the bitumen transportable in common-carrier pipelines. The current tight supply of this commodity is already fostering plans for offshore imports, and demand for naphtha will continue to grow as oil sands production increases.
--The gasification process also has the ability to capture a relatively pure stream of CO(2) suitable for sequestration or EOR opportunities in the local area.
-- The electrical power produced from the Project is expected to meet the power requirements needed to run the coal mine and CTL operations. Surplus power, if any generated, will be marketed in Alberta through the existing electrical grid system.
The Project is expected to meet or exceed all applicable existing Alberta
and Federal environmental standards. Progressive land reclamation activities
will be carried out closely behind active mine operations to ensure that
surface disturbance associated with the development is kept to a minimum.
CARBON DIOXIDE SEQUESTRATION
One of the main advantages of the gasification process is the ability to
capture the CO(2) produced in a relatively pure, sometimes called "capture
ready" form and Alter NRG intends to capture approximately 85% of the Project
CO(2) produced. Alberta has undertaken a number of studies to further
understand how industries can capture and store CO(2) in deep saline aquifers
or use it in enhanced oil recovery ("EOR"). EOR has been identified as a means
to not only store CO(2) emissions but also as a potential value added product.
Recently the Alberta government has announced a $2 billion fund to advance
projects that include CO(2) capture and EOR which illustrates the government
initiative behind this type of project.
Alter NRG has undertaken an assessment of oil pools that would be
amenable to use CO(2) for EOR within a 100 km (65 mile) radius of the Project.
The criteria used in the assessment to determine EOR amenable pools included
specific reservoir characteristics such as depth and original oil in place
(OOIP). The 100 km (65 mile) radius was used to reduce the scope and cost of
pipelining to suitable sites.
Based on these criteria, a total of 30 pools were identified that are
suitable for EOR, with OOIP of 7,642 million barrels of oil, and ability to
store over 228 million tonnes of CO(2). Alter NRG estimates that total CO(2)
required for EOR in these 30 pools will amount to an average demand of
approximately 27,000 tonnes/day over the economic life of the pools (around
20-30 years). This is somewhat more than the Project will produce during that
period, and the Project can provide a preferred source of CO(2) to the oil
producers in the area.
Engineering and environmental studies are planned to be carried out for
the remainder of 2008 and all of 2009. These studies will form the basis of
the Environmental Impact Assessment for the Project. Submission of the project
regulatory application is targeted for the end of 2009. It is anticipated that
submission of the application will be followed by an 18 month regulatory
review period. Construction will begin soon after receipt of all necessary
Alter NRG plans to start up mining operations by the fall of 2013, to
pre-build coal supply for startup of the CTL plant in early 2014. The CTL
plant will require a longer engineering design and construction period than
The Company initiated a strategic partner selection process in early 2008
and expects to provide further details on the development pathway and
financing plans at the conclusion of the process in the later part of 2008.
Alter NRG is pursuing alternative energy solutions to meet the growing
demand for environmentally responsible energy in world markets. The company's
vision is to become a senior energy producer and a leader in the development
of environmentally sustainable and economically viable gasification projects.
The Company's objective for the next decade is to utilize its commercially
proven plasma gasification technology to produce hydrogen, syngas, and
transportation fuels (diesel, naphtha, ethanol, etc.), steam and electricity,
all of which are fundamental products for the world's growing energy needs.