Consol Energy and Synthesis Energy Systems (SES) announced that the West Virginia coal gasification project will not be funded. CoalGasificationNews.com had reported on the West Virginia Gasification Project. Consol Energy had previously announced the West Virginia Gasification Project and the project was planned to be a Coal-To-Liquids project. The project would gasify West Virginia coal and produce methanol and convert the methanol to gasoline.

Both companies have announced that they will cease funding the Front End Engineering Design (FEED) for the Benwood, West Virginia project. SES cited the credit crisis in the financial markets as the reason for the project to be put on hold. The U.S. market continues to be a primary market opportunity for SES.

SES is bullish on coal gasification plants producing gasoline. Synthetic Energy Systems (SES) announced that SES will purchase 15 Methanol-to-Gasoline licenses from ExxonMobil Research and Engineering (EMRE).

The MTG process converts methanol to gasoline with no sulfur. ExxonMobil’s Methanol to Gasoline technology was developed and proven 20 years at a plant in New Zealand. The plant is no longer open, but the plant was shut down for commercial and not technological reasons.

SES plans to construct gasification plants in the United States with it’s proprietary U-Gas coal gasification technology. The plants will produce syngas using the coal gasification process and convert the syngas to methanol and convert the methanol with the MTG process unit to gasoline. SES and Consol Energy have announced a project in West Virginia and the first MTG license is slated for this plant. SES has other projects in development phases in the United States.

Consol Energy has announced its plans to build a coal gasification plant in West Virginia. Consol Energy is developing the plant through a joint venture with Synthesis Energy Systems. Synthesis Energy Systems LLC has a proprietary coal gasification technology, U-Gas(R), that will be used for the coal gasification process. The two companies have formed North Appalachia Fuel LLC to develop the project.

The companies have selected Benwood, WV near Wheeling as the site for the coal gasification plant. The plant will be at the Consul’s Shoemaker Mine and will be a ‘minemouth’ plant. The plant will convert coal to synthetic gas (syngas). The companies plan to convert the syngas to approximately 720,000 metric tons per year of methanol to be used as feedstock for chemicals. The methanol can be used to produce 100 million gallons of gasoline per year and the companies are negotiating with ExxonMobil to license their proprietary methanol-to-gasoline (MTG) technology to convert methanol to gasoline.

The companies have entered an agreement with Aker Solutions US Inc. to provide the Front-End Engineering and Design (FEED). As part of the FEED scope of work, Aker will evaluate carbon sequestration in deep saline aquifers. Sequestration of CO2 in saline aquifers is considered to be the optimum carbon solution for coal gasification plants.

The project will be provide jobs and boost the economy in West Virginia. The University of West Virginia has a supporting role with planning and analyzing the impact to the economy. The State of West Virginia is expected to approve special financing and tax incentives for the plant.