ConocoPhillips to Explore Development of SNG Plant

Peabody Energy and ConocoPhillips have agreed to explore development of a commercial scale coal-to-substitute natural gas, or SNG, facility using proprietary ConocoPhillips E-GAS technology.
It would be designed to annually produce 50-70 billion cubic feet of pipeline-quality SNG from more than 3.5 million tons of coal from the Midwest. In addition, presuming there is a supportive regulatory framework in place, the project scope will provide for carbon capture and storage.
“Our agreement with ConocoPhillips combines the strength of global industry leaders and proven technology that further demonstrates coal’s ability to build energy reliability, security and price stability,” said Gregory Boyce, Peabody president and CEO. “The energy value in Peabody’s vast coal reserve base exceeds the energy in the oil or gas reserves in the continental United States, offering strategic advantages for coal-to-gas projects and other Btu conversion projects.”
Peabody and ConocoPhillips would participate in project ownership along with other potential equity partners. The preliminary design and economic assessment is expected to be complete in early 2008.

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