Construction is slated to begin this year on a $2 billion gasification plant at the Port of Lake Charles.

Investors have secured land, $1 billion in Gulf Opportunity Zone bonds and a wetlands permit from the U.S. Army Corps of Engineers for the project two years in the making.

"It's more than just a concept," said Hunter Johnston, a Washington, D.C.-based development partner in the synthetic natural gas project led by Lake Charles Cogeneration, a subsidiary of Leucadia National Corp. of New York. If the current timeline holds, Johnston said, the plant should begin operation in 2012.

The project is one of the first of its kind nationally, Johnston said. It's also one representatives of a New Orleans economic development group see as a model for the rest of the state.

Greater New Orleans Inc. is pressing to develop gasification plants as part of a strategy unveiled last month it says will help revive the state's sagging energy sector.

The three-pronged proposal calls for altering the state's mineral taxing structure to spur exploration of deep natural gas, developing gasification plants to produce electricity and channeling carbon dioxide generated by the gasification process via pipeline to oil fields where it would be used to recover additional oil left behind by the conventional production process.

David Dismukes, associate director of the Center for Energy Studies at Louisiana State University, is optimistic about the possibilities presented by gasification development and by GNO Inc.'s energy plan generally.

"It is a good fit for the state," he said, calling gasification in particular "a good application of next generation technologies."

The Lake Charles plant will be fueled by petroleum coke -- a byproduct of the oil refining process and abundant in Louisiana -- and will produce pipeline-quality synthetic natural gas under contract to utility companies for electricity generation.

It is expected to produce about 40 billion cubic feet of SNG annually, Johnston said. That's more than a quarter of the 153 billion cubic feet of natural gas Entergy used to produce electricity statewide last year.

Customers, state benefit

Project principals argue their facility will prove advantageous for utility customers by providing a hedge against volatile natural gas prices. As part of a proposal sent to the Louisiana Public Service Commission, developers guaranteed their plant would result in savings to customers of $400 million over 30 years, Johnston said.

Meanwhile, Andrea Bland, GNO Inc.