Last updated: August 23. 2013 4:29PM - 1053 Views

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LIMA — With fresh funding, construction of the Lima Energy gasification plants seems to be nearing reality.



The company received needed funding in September, broke ground in November at the 63-acre site, and crews are now demolishing structures to prepare the land for the project.



It is the start of the first phase of the ultraclean converter plant and the construction of the Technology Innovation Center. The center along South Main Street will be the home of the company’s administration facility, research and development laboratories, auditorium, conference center, and cleantech showroom.



“We continue be excited about both projects moving forward,” said Lima Energy Chairman Harry Graves.



The Lima Energy Project, when fully operational, is set to produce the equivalent of 8 million barrels of oil, or about 47 billion cubic feet per year, of synthetic natural gas, and 516 megawatts net of electrical power.



But the path to construction has been a slow, arduous and winding journey. Many in the community doubt the facility will ever be constructed.



The players



Global Energy Inc. was founded in 1988 by Graves, a former executive at Procter & Gamble. It is an environmental energy technology company specializing in gasification technology, which it touts as an “environmentally superior and low cost method for producing power, gas, transportation fuel, and hydrogen.” The company has seven projects totaling 4,400 MW in various stages of development, construction and operation in the United States and Great Britain that are fully permitted, contracted, or in operation.



Global Energy is an affiliate of USA Synthetic Fuel Corp., which is also an environmental energy technology company focused on building ultraclean btu converters designed to enable America’s solid hydrocarbon resources to be transformed into low-cost synthetic fuel products such as transportation fuel (diesel, jet, gasoline), pipeline quality synthetic natural gas and hydrogen. The Company’s leading btu converters are in development and/or construction and are designed to produce 100,000 barrels of oil equivalent per day of low cost synthetic fuel. The company has established the long-term business objective of manufacturing and delivering 2 million BOE/day of low-cost synthetic fuel in the USA by 2030. The company owns or controls 1.2 billion BOE in solid hydrocarbon energy assets.



Lima Energy is a subsidiary of USA Synthetic Fuel Corp, a public company which was founded in 2009. It is an advanced energy company with plans to construct this cleantech synthetic fuel manufacturing facility in Lima. The Lima Energy facility is being designed to produce up to 8 million BOE per year of synthetic natural gas and 516 megawatts of power. At the end of last year, the company had a reported net worth of $6.63 million.



Slow start



It was Nov. 29, 1999, when city and Global Energy officials first rolled out the grand vision for an energy company at the former Lima Locomotive Works site. The city purchased the site for $687,500 in August 1999 from Kovalchick Salvage Yards. It wasn’t the first site in the city to be targeted for the project, however.



Company officials came to town in March 1998, invited by BP. The plan then was for Global Energy to take over after the refinery, now owned by Husky, was shut down. However, the refinery was not shut down and the project was shifted to the new location.



But the project stalled as company officials sought funding to move forward with the project.



To be sure, there were false starts. Most notably in 2005 when some construction was begun. However, the company halted the construction in 2006 pending obtaining full financing for the project. A 100,000-square-foot foundation was poured before construction was halted.



There were also permitting issues stemming from the long delays, requiring the company to obtain extensions on state-issued permits, which it successfully did, and to modify existing permits because of regulatory changes and plan modifications.



New funding



On Sept. 24, Third Eye Capital, a Canadian company, announced a debt-financing deal of $35 million along with $11 million in an equity investment from Global Energy.



“We’re a specialized investment firm. We don’t make just broad, general investments,” said Algis Vaitonis, senior vice president of portfolio operations for Third Eye Capital. “We look for very niche-oriented investments that provide very strong returns to our investors.”



It was this funding that permitted Lima Energy to break ground in November on the Technology Innovation Center, which Graves said would likely be completed early next year.



“So, hopefully this time next year we’ll be in offering you a coffee and perhaps a tour of the facilities,” Graves said.



The construction of the btu converter will take several years to construct and Lima Energy is still working to obtain funding for that phase of the project.



On Oct. 26, the company also purchased the 63-acre site from the city.



The product



When completed, the company is expected to produce ultraclean synthetic crude. The company could also produce, if it wished, hydrogen for fuel cells or industrial use and ultraclean transportation fuels such as diesel, jet fuel, and gasoline.



The company’s btu conversion technology converts solid hydrocarbons into synthetic gas, composed of carbon monoxide and hydrogen gases, which is further processed to produce low-cost clean energy products such as synthetic liquid energy products.



When the btu converter is complete, the Lima Energy plant is expected to provide power to Procter & Gamble Co.’s plant.



The company also plans to capture 100 percent of the carbon dioxide produced, compress it into a liquid and sell it to third parties for enhanced oil recovery operations or for permanent storage in saline aquifers.



Another byproduct of the gasification process, known as vitrified frit, will be sold for industrial use in things such as road construction. The company also hopes to capture and market elemental sulfur for use in the agricultural industry.






Lima Energy Company off South Main St. in Lima.
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