Evergreen Energy Shifts Strategy, Idles Wyoming Coal Upgrading Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Although technically still operating as of press time, Evergreen Energy Incorporated (NYSE:EEE) (Denver, Colorado) has announced plans to idle operations at its K-Fuel coal thermal upgrading plant in Gillette, Wyoming. First reported by Industrial Info in 2004, the $160 million K-Fuel coal thermal upgrading plant began operations at the Fort Union coal mine in 2007. After failing to reach rated capacity of 750,000 tons per year, Evergreen Energy hired Bechtel Corporation to perform an optimization study for bringing the plant up to its rated capacity.

Optimization of the plant to bring it up to the desired capacity would cost in the ballpark of $95 million and was planned to be implemented during outages in the fall of 2007 and first quarter of 2008, when a series of projects would be performed. The optimization project appears to be canceled because in a March 20, 2008, letter to shareholders, the company announced plans to idle the plant and shift capital expenditures away from the Wyoming plant to other projects, namely the construction of a 1.5 million ton per year K-Fuel coal upgrader and terminal in Kalimantan, Indonesia and other domestic projects. Originally, the company had focused on building mine-mouth projects, but that strategy has shifted to locating coal upgraders at end-user sites, namely power plants with good transportation infrastructure in place.

Bechtel had also been evaluating the possibility of adding a 100-megawatt coal-fired power plant at the Fort Union site. That project has been canceled, as well.

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