RENTECH ACQUIRES SAND CREEK METHANOL FACILITY

Rentech Inc. announced in December that it and Republic Financial Corporation have signed a definitive purchase agreement for the Sand Creek methanol facility located in Commerce City, Colorado, a suburb of Denver. Rentech and Republic are developing a plan to convert the facility to a Gas-To-Liquids (GTL) plant making Fischer-Tropsch diesel, naphtha, petroleum waxes and other products.

The methanol plant is adjacent to a refinery owned by Conoco Inc., visible and accessible from Interstate 270, and served by both a railroad spur and natural gas transmission line. The asset purchase includes the methanol plant, all the supporting infrastructure, buildings and the underlying 17-acre site.

The new owner of the facility will be Sand Creek Energy LLC (SCE) which is 50 percent owned by Rentech Development Corporation, a wholly owned subsidiary of Rentech Inc., and 50 percent owned by Republic Financial Corporation-Sand Creek Development LLC, a wholly owned subsidiary of Republic Financial Corporation, headquartered in Aurora, Colorado.

Sand Creek commenced operations in 1992. The plant, operational until recently, produced approximately 25 million gallons of methanol during 1998. The facility was shut down due to the oversupply of methanol in the world market.

SCE is developing a plan to convert the methanol plant into a GTL facility capable of producing from 800 to 1,000 barrels per day of high-value fuels and products including clean-burning sulfur and aromatic-free diesel fuel made from natural gas.

Much of the infrastructure necessary for a GTL plant is already in place at the Sand Creek location, most importantly the synthesis gas generation equipment. This equipment processes the natural gas feedstock into synthesis gas or syngas which is required to make Rentech’s Fischer-Tropsch (F-T) fuels and products. Capital costs necessary to retrofit the Sand Creek facility to produce the F-T fuels and products are expected to be 50 to 60 percent less than constructing a "green field" plant. Additionally, the engineering and construction timeframe is expected to be substantially less than that required for a new GTL plant. SCE is targeting startup of the plant by mid-2001.

In the event SCE is able to acquire the necessary funding to convert the plant, it is expected that Sand Creek could be the first operational commercial-scale GTL plant in the United States in the last 40 years. The plant is expected to be in commercial production 3 to 5 years ahead of other domestic GTL facilities. SCE also views the Sand Creek project as having the potential to provide additional forms of clean energy on the 17-acre site. Significant quantities of natural gas in excess of GTL plant requirements can be delivered to the site. That gas, together with surplus hydrogen produced by the GTL process itself, may provide the feedstock for other applications to produce clean power including stationary fuel cells.



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