West Virginia Corporate Moves
First Major U.S. Coal-to-Liquids Plant to be Built in Benwood
The nation’s first modern coal-to-liquids plant will be built in the Marshall County Industrial Park in Benwood, WV.
Consol Energy Inc. and Synthesis Energy Systems Inc. (SES) intend to jointly develop their first U.S. coal gasification and liquefaction plant in an $800-million investment. Consol and SES have formed Northern Appalachia Fuel LLC (NAF) to develop the new plant.
Gov. Joe Manchin and Sen. Jay Rockefeller, with support from Sen. Robert C. Byrd and West Virginia’s Congressional delegation, company executives and officials from the Regional Economic Development Partnership (RED) announced the project in July.
Coal will be converted to synthetic gas using SES proprietary technology. The synthetic gas will be used to produce about 720,000 metric tons per year of methanol that can be used as a feedstock for the chemical industry. Officials expect the project will be capable of converting methanol to about 100 million gallons per year of 87-octane gasoline.
As envisioned, the project will include a river terminal facility, where products will be stored in tanks for off-loading into barges for delivery to energy users.
According to press reports, the West Virginia Development Office offered incentives worth up to $196 million to the Consol Energy and SES joint venture.
When Gov. Manchin and the companies announced plans for the plant, Manchin’s office said Consol, SES, the state and the Regional Economic Development Partnership had signed a memorandum of understanding under which the state and the partnership will provide financing and tax incentives to the project over a 10-year period.
The state will provide the project team the Economic Opportunity Credit-a state tax break that allows a company to apply 20 percent of a project’s investment as a credit against the company’s corporate net income and business franchise taxes over 10 years.
The value of this incentive is projected to be $160 million, but is limited by the project’s actual state tax liability, the memo reads.
The memo also says that if the project moves forward as planned, the Regional Economic Development Partnership will host a meeting with the Marshall County Commission, at which time the joint venture can request a tax-increment financing plan agreement with the county for utility and major infrastructure improvements. The tax-increment financing plan is estimated to be worth up to $35 million.
Tax-increment financing uses increases in property tax revenues from a designated district for infrastructure improvements.
The memo also says the Regional Economic Development Partnership will sell the joint venture 23.5 acres in the Marshall County Industrial Park contingent on terms outlined in an April 3 purchase agreement.
ESSROC Plans $500 Million Upgrade of Martinsburg Cement Plant
ESSROC Cement Corp. is upgrading its huge cement plant in Martinsburg, WV, a project that is expected to invest $500 million in the facility. The project, expected to be completed early in 2010, will transfer substantial activities from the company’s cement plant in Maryland, which will continue operations.
Unlike the Maryland plant, the Martinsburg plant has new pre-heat tower technology that saves time in turning stone into cement, according to company officials.
Two years ago, ESSROC undertook a $320-million expansion and modernization of the Martinsburg plant in order to increase its capacity up to 6,000 short tons of “clinker” per day.
Headquartered in Nazareth, PA, ESSROC is a leading North American cement manufacturer with an annual capacity of seven million metric tons, operating eight plants and a grinding facility in the United States, Canada and Puerto Rico. ESSROC acquired the former Capital Cement Plant in Martinsburg in 2002.
In 2006, ESSROC president George Gregory credited the Berkeley County Commission and the West Virginia Economic Development Authority for playing a pivotal role in the earlier expansion. “[The expansion] was a culmination of more than two years’ work by a host of individuals from within our company, the county and the state,” he said.
ESSROC is part of Italcementi Group, one of the largest cement producers in the world and the biggest in the Mediterranean basin. Based in Bergamo, Italy, the Group operates in 19 countries with a staff of over 20,000 and consolidated sales of 4.5 billion euros (about $5.4 billion) in 2004.
WVEDA Approves Two Loans
During its July meeting, the West Virginia Economic Development Authority (WVEDA) gave final approval for loans for two companies:
• W. A. Wilson & Sons, $695,000, to purchase glass tempering equipment to be installed at its facility in Wheeling. In business since 1841, W.A. Wilson is a wholesale distributor of glass architectural aluminum products. Currently W.A. Wilson employs 66 workers, a number the company expects to expand to as many as 81 within three years.
• HAGO Company, $79,000, to finance a 25,000-square-foot expansion to W.A. Wilson & Sons’ plant in Wheeling. HAGO will lease the facility to W.A. Wilson & Sons.
In other action, WVEDA approved $43.3 million in tax-free bonds to help pay for construction of the Longview power plant near Morgantown. The Longview project currently employs more than 500 construction workers. The plant is expected to begin generating electricity in 2010.