Montana Coal-to-Liquids Plant Progresses after Australian-American Energy Drops Lawsuit Against Tribe

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Researched by Industrial Info Resources (Sugar Land, Texas)--The "Many Stars" coal-to-liquids project in southeastern Montana is still under development after project developer Australian-American Energy Company (Houston, Texas) recently dropped a lawsuit against the Crow Nation. The lawsuit stems from the tribe's claims that Australian-American was not spending enough money to keep the $7 billion project afloat.

The company is beginning Phase I of the project, in which survey and exploration of the 5,000-acre coal reserve in Big Horn County will determine the best location for the plant.

The estimated $600 million to $700 million Phase I involves drilling bore holes 400 to 500 feet deep to determine coal resource assessment, coal beneficiation planning, off-take agreement planning, environmental permitting, and coal mine planning. That process is expected to take 12 to 18 months to complete, and plant construction is not expected to begin until mid-2013.

The plant will utilize the direct coal liquefaction process technology developed by Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), and ramp up capacity from 8,000 barrels per day of diesel, jet fuel and napthta to 50,000 barrels per day.

Australian-American Energy selected AMEC Paragon (Houston) to provide feasibility and environmental impact studies, and an engineering, procurement and construction contractor will be selected to construct the plant.

Construction could begin as early as the first quarter of 2013, and the plant could be online mid-2016.

There are about 52 coal gasification projects in the works in North America, and not a single plant has mobilized equipment to a site and started turning dirt. Construction and capital investment for the projects nears $60 billion in forecasted capital spending.

Industrial Info's databases provide a comprehensive outline of all current development activities in the emerging alternative fuels market. Our North American Biodiesel Database covers 136 operational plants and 90 plants under development. Our North American Ethanol Database covers 214 plants currently in operation and 138 plants under various development phases. Our North American Wood Fuel Pellet Database includes 63 operational plants producing greater than 25,000 tons annually, and 38 projects under progress.

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