KFx UPDATE
August 8, 1997
We have received numerous inquiries about the status of the commercial plant and our plans to further the technology. We are providing this update to answer those questions.
Gillette Commercial Plant Status Report:
- Fire on December 24, 1996, was caused by faulty installation of pipes in hot oil heater.
- Two processors remained available for testing.
- Some flowability and other startup problems were encountered.
- Fixes for the flowability installed in two units, with the other two to be completed in 30 days.
- 91 runs were made with the two available units.
- The compacted product test pile has been stable for 83 days.
- Fire damage reconstruction is complete and the systems are now being tested. Damage, including delayed startup costs, was fully insured.
- With the plant still under contractor’s control and before turnover to KFP, TCK requested a punch list safety and environmental review.
- At the point when successful runs in units 1 & 2 were achieved, the audit discovered engineering miscalculations on venting equipment valves in the system.
- Of the series of consecutive runs performed prior to the discovery of the engineering error, several produced quality K-Fuel product of 12,200-12,600 Btu.
- The solution to the engineering errors is estimated to take approximately 12 weeks. All costs and damages are the contractor’s responsibility.
- TCK and KFx are taking this time to make some improvements to the system to enhance the operating efficiency and performance of the plant.
- None of the construction or engineering problems are the result of the technology.
- It has been demonstrated that K-Fuel can be produced in the facility.
- No losses, no material holdup or effect to KFx has occurred. The fundamentals of the technology are proven sound.
Corporate Status Report:
- KFx is prepared to construct the first activated carbon plant using the Koppelman process. Technology has been verified by Hazen Research and construction engineering is proceeding.
- KFx is in the engineering and permit phase of the 5th processor.
- K-Fuel LLC has designed and is pricing the 3 million TPY plant for Indonesia. Final conceptual design (including three new patents assigned to KFx from Kennecott) has been determined.
- With the KFP plant nearing completion, KFx can now substantially reduce overhead and R&D expenditures.
- The Corporate objective is to be cash positive by year-end 1998.
- Having funded the debentures, KFx will:
- Continue development of the 5th processor
- Pursue alternate investment opportunities – i.e., existing plant
- Construct an activated carbon plant
- Aggressively work to close the Indonesian project
- Demonstrate compaction system for Turkish project
- Prepare a financing package for the Turkish project
- Continue to develop large-scale K-Fuel plants worldwide through the LLC with Kennecott
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