AMERICAN SODA MINING NAHCOLITE IN PICEANCE CREEK BASIN OIL SHALE DEPOSIT

American Soda LLP has completed construction of its $240-million in situ nahcolite solution-mining project in Northwestern Colorado.

First product shipments were made in October 2000. Design capacity is 1 million tons per year soda ash and 150,000 tons per year Na2(HCO3)2, based on mining of 1.6 million tons per year nahcolite. Production during 2001 is planned at about 75 percent capacity.

American Soda is a 60/40 joint venture formed in 1996 between the Williams Soda Products Company, part of the Tulsa, Oklahoma-based Williams Companies, and American Alkali, a privately held company based in Glenwood Springs, Colorado. The Williams Companies operate 27,000 miles of gas pipelines throughout the United States and are providing important pipeline expertise to the American Soda project.

American Soda’s production facilities include solution mining operations and a preliminary processing plant in the Piceance Creek Basin near Meeker, Colorado, and final processing, packaging, and shipping facilities near Parachute, Colorado, 44 miles to the south.

The two sites are linked by dual, insulated 12-inch underground pipelines. One pipeline carries a heated, carbonate-rich brine from the upper site to the lower site. The second pipeline returns spent makeup liquor generated at the Parachute plant back to the upper site for reuse in the solution mining process.

American Soda mines nahcolite by injecting high-pressure water at elevated temperatures into vertical wells to depths of 1,500 to 2,000 feet. Nahcolite is returned to the surface as a highly saturated NaHCO3 solution. The company is drilling 26 wells but anticipates that as mineral cavities expand, production will be maintained using half that number. Idle wells will be held in reserve to ensure an uninterrupted source of raw material. The upper site plant will strip CO2 from the well output liquor ahead of pipeline transport. This will create a solution more suitable for pipeline transport and generate a low-cost source of CO2, providing the lower plant with ample quantities of a key raw material.

The 1,000-acre lower site was the prior location of Unocal’s shale oil upgrading plant. American Soda acquired the property in May 1999. Along with the property and infrastructure, American Soda acquired key rights to water from the Colorado River.

Prior oil shale development work in the region also has benefited American Soda by providing a pool of experienced industrial workers.

The lower site is located just north of Parachute within 4 miles of Interstate Highway 70 and is served by the Union Pacific and Burlington Northern railroads. The site will have holding capacity for about 70 railcars and loading capacity to handle about 10 railcars per hour.

The Piceance Creek Basin is the only substantial source of naturally occurring sodium bicarbonate known in the world today. It is estimated to contain some 29 billion metric tonnes nahcolite and 26 billion metric tonnes dawsonite (NaAlCO3(OH)2). Nahcolite nodules are located in beds with a thickness exceeding 500 feet in some places. Nahcolite is intermixed with oil shale. Some concern has been expressed that removing the nahcolite will damage the ultimate prospects for recovery of the shale oil resource. American Soda says that the oil shale should not be affected.

A second company, Ameralia, has obtained permits to build a pilot plant and then a commercial plant to compete with American Soda. The project is still in the capital-raising stage.


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