MIDDLETOWN — A $300 million plant to be built in Middletown is projected to create 15 jobs and at least 150 temporary construction jobs while creating energy to power AK Steel’s Middletown Works.

Air Products and Chemicals Inc., based in Allentown, Pa., has developed a combined cycle power generation concept to capture and process AK’s blast furnace gas normally flared — burned off — to make energy to power the steel mill. The gas can generate more than 100 megawatts of power, saving an estimated 2.7 trillion Btu annually, according to the U.S. Department of Energy, which has granted $30 million in federal stimulus funds for the project.

Air Products approached AK in 2008 regarding the project. The company already supplies oxygen to the local mill. Currently, the company is bidding out gas turbine suppliers and will then design the facility around that piece, said Joe Terrible, business development manager for Air Product’s combined heat and power businesses.

The project still has several hurdles to overcome, including air permitting from the Ohio Environmental Protection Agency. While Terrible said he is aware of the permitting issues AK has been having with partner SunCoke Energy Inc. over a coke plant to be built in Middletown, since the Air Products plant would be built inside AK’s fence and represent a net benefit in air quality, he said he does not foresee similar problems.

“If you look at the site as a whole, there is no increase in emissions,” he said. “And it won’t change the amount of steel produced, but it will make it more economically competitive.”

To Terrible’s knowledge, no other U.S. steelmakers are using blast furnace waste gases to produce energy.

“The technology we are providing here is something that could be applied at other mills in the U.S. to make them more competitive,” he said. “One of my personal goals is to do that.”

The project likely would not be constructed until late 2010 and be operational by 2013, Terrible said. Only 10 percent of the funding has been secured through the DOE grant. While Air Products typically finances its own projects, no final determination has been made on whether it will partner with AK Steel to fund construction of the plant.

Contact this reporter at (513) 705-2843 or jheffner@coxohio.com.