Lake Charles Clean Energy Announces Contracts With BP, Air Products And Denbury; Advances First-in-the-Nation Project With State-of-the-Art Gasification For Clean Fuels
$2.5 Billion Investment in Louisiana's Economy Would Create up to 1,500 Construction Jobs, Provide Clean Fuels for State's Petrochemical Industry and Use Carbon Dioxide to Boost Domestic Oil Production
LAKE CHARLES, La., Oct. 29, 2012 /PRNewswire/ -- Lake Charles Clean Energy (LCCE), LLC announced today that it has secured major long-term commercial offtake contracts with BP Products North America Inc., Air Products and Chemicals, Inc. and Denbury Onshore LLC, a subsidiary of Denbury Resources Inc., for the Lake Charles Clean Energy project located at the Port of Lake Charles, Louisiana. LCCE is a subsidiary of Leucadia Energy, LLC. Securing long-term commercial offtake contracts is a major milestone, as it enhances Leucadia Energy's ability to seek and obtain necessary third-party financing for the project prior to commencing construction. This project, employing commercially proven gasification technologies to cleanly manufacture industrial products from petroleum coke, would be the first of its kind in the U.S. LCCE is expected to be one of the world's lowest-cost producers of methanol and hydrogen and a low-cost producer of other products used in the chemical and refining industries. In addition to extraordinary limitations on emissions of Criteria Pollutants, the plant is designed to capture, compress and sell 90 percent of its carbon dioxide ("CO2") production for use in Enhanced Oil Recovery ("EOR") in the US Gulf Coast. BP Products North America Inc. will purchase the majority of the methanol production and Air Products will purchase all of LCCE's hydrogen and argon and also provide the air separation units to supply the required oxygen for the project. Denbury Onshore LLC will purchase all of the captured CO2. Thomas E. Mara, President of Leucadia Energy (an indirect wholly owned subsidiary of Leucadia National Corporation) (NYSE: LUK), said: "The commercial offtake contracts with BP and Air Products, together with the existing long-term CO2 contract with Denbury Onshore LLC, are major commercial milestones required to facilitate financing for the project. Having these companies as our customers validates our business model and our vision of bringing a clean fuels facility to Lake Charles. These offtake contracts, along with our success at obtaining all required federal, state, and local permits and approvals, mean the ongoing site work will continue and should facilitate project construction next year. Our current success is a direct result of the ongoing strong support of the Port of Lake Charles, Calcasieu Parish, the Cities of Sulphur and Lake Charles as well as the many local businesses working with LCCE to turn this project into a reality." A final investment decision in the project remains subject to third party financing and board approval by Leucadia National Corporation. As part of its financing efforts, Lake Charles Clean Energy has retained Credit Suisse AG and its affiliates, Citigroup and its affiliates, and Jefferies & Company, Inc. and its affiliates to provide advisory services related to potential placement of project equity.