Monday, November 28, 2011

Kinder Morgan to buy Arizona carbon dioxide - helium field

A subsidiary of Kinder Morgan is buying the St. Johns Dome carbon dioxide and helium field in eastern Arizona and other properties from Enhanced Oil Resources Inc. (EOR), for $30 million, according to recent news reports.

EOR subsidiary Ridgeway Arizona Oil Corp. has been developing the field for a number of years, intending to use the CO2 for enhanced oil recovery projects in New Mexico and Texas. However, a worldwide shortage of helium has pushed the price high enough that it's become a valuable commodity as well.

In addition, Utah-based GreenFire Energy has a partnership with EOR for development of a CO2-based demonstration geothermal power plant near St. Johns Dome, using the CO2 from the field instead of steam to generate electricity. There's no immediate word on how the Kinder Morgan deal may affect this project. US DOE granted GreenFire $2 million towards testing the technology.

EOR CEO Barry Lasker is quoted as saying the financing of the St. Johns Dome project was "too onerous on a company of our size" so the expectations are that Kinder Morgan can bring the resources to bear to complete it.

The purchase is scheduled to close on Dec. 1.

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