Lake Charles methanol project wins DOE conditional loan commitment

The US Department of Energy announced it conditionally will guarantee up to $2 billion in loans for Lake Charles Methanol LLC’s proposed petroleum coke-to-methanol facility in Lake Charles, La. Carbon dioxide that will be captured there will be transported by pipeline to southeastern Texas, where it will be used for enhanced oil recovery, DOE’s Loan Programs Office said on Dec. 21.

The commitment not only is the first under LPO’s Advanced Fossil Energy Projects Solicitation, but also the first petcoke-to-methanol plant in the US, it indicated. It also would be the world’s first methanol facility to use carbon capture technology and would become the world’s largest industrial manufacturing carbon capture facility, LPO said.

“Carbon capture, utilization, and storage [CCUS] technology is on the cusp of commercial-scale deployment,” LPO Executive Director Mark A. McCall said. “DOE’s offer to finance the Lake Charles Methanol project could play a role in helping to bridge the funding gap for CCUS so this technology is financed by private lenders in the future.”

A number of steps remain and certain conditions must be met before DOE issues a loan guarantee, but the conditional commitment offer demonstrates the department’s intent to support a project’s construction, completion, and operation, he said. “In the meantime, LPO is continuing to work with the Lake Charles Methanol team on this important and innovative fossil energy project that is expected to create good-paying jobs in Louisiana and Texas,” McCall said.

LCM Chief Executive Don Maley said that the project will use General Electric Co. technology to turn petcoke into synthetic gas, which then will be converted into marketable products with other technologies that LCM will license. The gasification will reduce pollution by 99% over conventional uses of petcoke, and capture up to 90% of the CO2 which would have been emitted otherwise, he noted.

Reaching a conditional commitment with DOE over terms of a loan from the US Treasury’s Federal Financing Bank under DOE’s loan guarantee program is an important milestone, according to Miley. LCM hopes to reach financial closing during 2017 after it finishes raising equity and develops the project, he said.

“Today’s announcement underscores continued important advances in carbon capture technology and the potential for further deployment at industrial facilities,” the National Enhanced Oil Recovery Initiative said in response to the Dec. 21 announcement.

“While much attention has focused on capturing emissions from power plants, various carbon capture technologies have been successfully deployed commercially in the US for nearly a half century across a number of industrial sectors, including natural gas processing, industrial gasification, fertilizer production, fermentation of ethanol and, most recently, refinery hydrogen production,” it pointed out.

Contact Nick Snow at

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