Great Plains Project: at worst a $1. 7 billion squeeze
On January 29, 1982, seeking a loan guarantee for its coal-to-gas synfuels project, Great Plains Gasification Associates told the Department of Energy that they expected to reap $1.2 billion in net income to the partnership during the first 10 years of the venture. On March 31, 1983, Great Plains treasurer Rodney Boulanger had a different projection: a horrific loss of $773 million in the first decade. The Great Plains project, with construction 50% complete, is being built near Beulah, ND. The project has a design capacity of 137.5 million cubic feet a day of SNG. Great Plains' analysis assumes that the plant will operate at 70% of design capacity in 1985, 77% in 1986, 84% in 1987 and 91% thereafter. The company projects the total project cost at $2.1 billion, consisting of plant costs of $1.9 billion and coal mine costs of $156 million. In originally projecting a cumulative net income of better than $1 billion, the partners anticipated running losses in only three of the first 10 years, and cash distributions from the project of $893 million during the first decade. Under the new projections, even in the best case, the first four years would show losses and there would be no distribution to the partners. In the worst case, the project would run in the red every year for the first 10 years.
- OSTI ID:
- 6422024
- Journal Information:
- Energy Dly.; (United States), Vol. 11:68
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
29 ENERGY PLANNING
POLICY AND ECONOMY
COAL GASIFICATION PLANTS
ECONOMIC ANALYSIS
PROGRAM MANAGEMENT
NORTH DAKOTA
FORECASTING
ECONOMICS
FEDERAL REGION VIII
INDUSTRIAL PLANTS
MANAGEMENT
NORTH AMERICA
USA
010404* - Coal
Lignite
& Peat- Gasification
294001 - Energy Planning & Policy- Coal
295000 - Energy Planning & Policy- Hydrogen & Synthetic Fuels