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Show $1.1 billion sought for Paraho project Paraho Development Corp. and its four partners will commit about $450 million to their planned oil shale project south of Bonanza if the U.S. Synthetic Fuels Corp. will commit $1.1 billion, the company said Thursday. The Englewood, Colo, based company said the partners sent letters to the SFC Thursday "expressing a conditional commitment to take an equity position in the Paraho-Ute Shale Oil Project. The SFC, with $15 billion under its control, con-trol, is reviewing numerous porposals seeking funds to start synfuels projects. It was created and funded under the Carter administration to stimulate the development of alternative energy resources in the United States, but has yet to fund any projects. ... . .;J The Paraho-Ute partners are Kellogg " Rust Synfuels Inc., a subsidiary of Wheela bra tor-Fry e Inc., Hampton, N.H., Raymond Kaiser Engineering Inc., a subsidiary of Raymond International Inc. Houston; Sohio Shale Oil Co., a subsidiary sub-sidiary of Standard Oil Co. (Ohio), Cleveland and Texas Eastern Synfuels Inc., a subsidiary of Texas Eastern Corp., Houston. With Paraho, the companies have indicated in-dicated they will invest in an underground oil shale mine and surface "retort" facility to cook about 11,300 barrels bar-rels of shale oil daily out of crushed shale. The project would begin production produc-tion at the initial rate in late 1985 or early ear-ly 1986, a Paraho spokesman said. The companies must agree to commit funds under the SFC's guidelines, which require that when loan guarantees are requested, the government's participation participa-tion will be no more than 75 percent of anticipated project cost. The Paraho-Ute request seeks $1.1 billion in loan guarantees which would be convertible to price guarantees. Under price guarantees, the government agrees to guarantee a minimum price for shale oil. Thus if the selling price is lower, the government would make up the difference. dif-ference. The device protects "start-up" projects in new synfuels technologies from price risk of the oil market. A Paraho spokesman said the project is "fully permitted and ready to go," awaiting funding. The SFC, scheduled to meet March 24, isn't likely to decide on the Paraho-Ute funding tequest at that time, he said. But spokesmen for the company Wednesday said they were hopeful they would move closer to an agreement at the meeting. It could decide whether to move into advanced discussions with the sponsors. He said the Paraho-Ute project, unlike many other shale projects rejected by the SFC, already has passed the SFC's project "maturity and strength ... requirements." c |
