Denbury studies Midwest carbon dioxide pipelines

The feasibility study will investigate multiple pipeline routes to evaluate the best connection to proposed gasification plants in the region, estimated construction costs and regulatory requirements.

The pipeline is estimated to cost approximately $US1 billion, and the company has not ruled out financing the project with joint venture partners, government support or bank financing.

The Illinois Department of Commerce and Economic Opportunity will provide funding for the study on the Illinois portion of the pipeline, which is expected to be completed in the fourth quarter of 2009. Denbury estimates the pipeline will take approximately four to five years to complete.

The study comes as two proposed Midwestern gasification plants, with which Denbury has carbon dioxide purchase contracts, have been granted approval to the term sheet negotiation phase under the US Department of Energy loan guarantee program.

A third proposed gasification plant has also been selected by the loan guarantee program to be built along the Gulf Coast of Mississippi. Denbury plans to commission a study for a 177 km pipeline that could connect the plant to the existing Free State Pipeline.

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