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project remained an important part of the partners’ business
plans.
On March 25, 1983, the partnership advised DOE that changing
economic conditions required changes in the project’s financial
structure. The same day, each partner notified DOE that it
believed that conditions existed that would permit it to vote to
terminate participation in the project pursuant to the partners
consent and agreement, but that it did not presently intend to
exercise this right.
Debt Restructuring Negotiations
In 1983, the partnership’s representatives began meeting
with officials of DOE and the Synthetic Fuels Corp. (SFC) to
negotiate additional financial assistance for the project. On
September 13, 1983, the partnership applied to SFC for interim
price supports for the synthetic natural gas to be produced by
the project. The partnership advised SFC that interim price
supports would make possible the plant’s completion and
operation. Plant construction was then 72 percent complete and
on schedule. Approximately $1.2 billion had been invested in the
project: $383 million represented the partners’ equity capital;
the balance was FFB debt guaranteed by DOE.
Negotiations between the partnership and SFC over price
supports dragged on until July 1985. In the meantime, DOE--which
was monitoring the SFC negotiations--began contingency plans with
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