DKRW Advanced Fuels LLC is working with leading industry and financial partners to develop a greenfield, mine-mouth, coal-to-liquids (CTL) facility in Medicine Bow, Wyoming. The facility will use Carbon Basin coal to produce refined liquid products that meet critical energy needs in an environmentally responsible manner. We have secured coal reserves and key technology licenses. Construction of the first phase, which will produce approximately 11,000 barrels per day of ultra-clean diesel and chemical-grade naphtha, is scheduled to start in late 2007 with an in-service date in late 2010. Future expansion will increase production to 35,000 bpd.

The Medicine Bow project will use an indirect liquefaction process to convert coal resources into refined products. The plant will first gasify coal, remove almost 100% of the sulfur, capture CO2 for sequestration, and use Fischer Tropsch technologies to convert the resulting syngas into refined liquid products that significantly beat current EPA standards.

CO2 captured during coal gasification can be purified, liquefied and safely sequestered in underground reservoirs such as depleted oil and gas fields, deep unmineable coal seams or deep saline aquifer formations. CO2 can be put to productive use to recover additional oil from mature fields or methane from unmineable coal beds. Current plans are to sell CO2 from the Medicine Bow project into the enhanced oil recovery market in Wyoming.

A portion of the syngas and all of the heat produced at the facility will be used to generate electricity using IGCC (Integrated Gasification Combined Cycle) technology. Most will be used to power the facility, but some will be available for sale into the electrical grid.

Medicine Bow Fuel & Power entered into a long-term contract to sell 100% of the ultra-low-sulfur diesel fuel to Sinclair Oil Corporation, which will market the fuel in the Rocky Mountain region.

The project will bring many benefits to the local community and the nation. In addition to an estimated 300 full-time operating jobs, the area will gain a significant number of construction jobs over a four-year period, with the average number estimated at 600 and the maximum expected to be up to 1,500. The estimated investment of approximately $1.5 billion will boost property taxes, and the facility will increase coal severance taxes and oil royalties to the state.

On a broader scale, the US will benefit from the domestic petroleum production, reduced dependence on foreign sources of energy and increased US refined goods production.

Medicine Bow Fuel & Power LLC, the developer, owner and operator of the CTL facility, is wholly owned by DKRW Advanced Fuels LLC. DKRW Energy owns 75% of DKRW Advanced Fuels, and Arch Coal owns the remaining 25%.