In a recent look at Valero Energy
The folks at Leucadia are becoming increasingly active in the natural resources sector, and their moves are always worth watching. While the Krotz Springs refinery is falling into different hands, Leucadia still has a very interesting project located not far to the southwest, at the Port of Lake Charles.
Before we get to that, we need to talk about petroleum coke. No, this isn't an ill-conceived flavor of Coca-Cola. Petroleum coke, or pet coke, is a heavy fuel source produced when oil refiners split crude oil into different commercial products. Like coal, pet coke can be burned to generate power. Also like coal, pet coke can be gasified in order to provide cleaner-burning "substitute natural gas," along with other commercial byproducts.
Leucadia's wholly owned subsidiary, Lake Charles Cogeneration, has proposed building a $1.6 billion petroleum coke gasification facility. KBR
The project has been well-received locally, judging by the successful sale of $1 billion in bonds last month. It's also important to note that Lake Charles is located in a hurricane-affected region of the state and thus qualifies for Gulf Opportunity Zone tax incentives. Not only are the bonds tax-exempt, but they also offer very low interest rates. Super-attractive financing is one sure way to draw the attention of superinvestors.
Lest you think this is some pie-in-the-sky venture, there are successful gasification projects already out there. One is operated by CVR Energy