LOUISVILLE, Ky. (AP) - Peabody Energy and ConocoPhillips have settled on Kentucky for a proposed $3 billion plant that would convert coal into a cleaner-burning synthetic natural gas.
Peabody Energy executive Rick Bowen said a feasibility study will focus exclusively on sites in western Kentucky.
"This review will continue into next year, followed by a detailed engineering and design study," Bowen said Monday. "Completing the feasibility study and preliminary engineering and design work will be necessary before selection of a final site and ultimately, a final investment decision by our project managers."
St. Louis-based Peabody had considered several locations in Kentucky, Illinois and Indiana for the proposed plant. But the search was narrowed to Kentucky after the state Economic Development Finance Authority agreed last week to provide Peabody $250 million in tax incentives.
Bowen said the proposed plant would employ 400 to 500 people in both the conversion plant and in an adjacent coal mine in either Henderson, Union, Ohio, Webster or Muhlenberg counties. The plant would use about 2.5 million tons of coal per year.
An economic impact study performed by the Kentucky Office of Research and Information Technology estimates the construction phase alone would generate 1,200 jobs worth about $229 million.
"The project will create hundreds of jobs and provide extraordinary long-term economic benefits for the citizens of Kentucky," Gov. Ernie Fletcher said. "Peabody has had a long-standing presence in Kentucky and will continue to be an important partner in achieving energy security within the state."
Peabody is the world's largest private-sector coal company, with 2006 sales of 248 million tons of coal and $5.3 billion in revenue. Its coal products fuel approximately 10 percent of all U.S. electricity and more than 2 percent of worldwide electricity.