CHEYENNE -- The director of the Office of State Lands and Investments is recommending -- subject to a list of stipulations and conditions -- that the state issue a special lease on school trust land in Sublette County for a natural gas processing and carbon sequestration plant.

The governor, secretary of state, auditor, treasurer and state superintendent of public instruction who sit on the Wyoming Board of Land Commissioners will vote Thursday on the recommendation.

The state officials toured the site in June along with a group of local landowners.

Cimarex Energy Co. of Denver is planning to build the $100 million plant.

It's estimated the operation would generate $24 million in severance taxes and $19,000 for the state's school trust fund each year.

The Wyoming Game and Fish Department has opposed the site because the area is critical winter range for the Riley Ridge herd of about 200 elk.

Lynne Boomgaarden, director of the state office, said that Cimarex and the Game and Fish Department have agreed to a list of stipulations.

"It appears to me that the thing is moving toward a resolution that is positive for Cimarex and positive for the state," Gov. Dave Freudenthal said Friday.

The company, he said, has agreed to pay $1.5 million into a mitigation fund.

But a late objection has been raised to the project.

"Recently we were apprised of a landowner's concern about possible brucellosis issues related from the herd being forced down into private property," the governor added. "We haven't had time to pursue it."

Boomgaarden said the Cimarex mitigation fund will be used for damage prevention if the plant displaces the elk; for radio collars to research the impact, if any, on the elk; and for elk habitat enhancement in a defined area.

Those conditions were adopted after the state board members inspected the site in June and said they wanted the Game and Fish Department and Cimarex to reach an agreement, Boomgaarden said.

Cimarex officials believe the state school trust land is the best site available for the plant, which would be the largest carbon sequestration project in the world when finished.

The company plans to drill five, 20,000-foot-deep, horizontal wells that would provide the gas stream to the plant from two existing five-acre well pads.

The stipulations prohibit site preparation and construction in the elk critical winter range from Nov. 15 to April 30 and prohibit employees or contractors from carrying firearms to or from the site.

Dogs, except guide dogs, are also prohibited by the stipulation list.

The agreement requires, among other things, mandatory reprimand or dismissal of employees convicted of unlawful taking of wildlife while employed by the company or while on company property.

Contact Joan Barron at joan.barron@trib.com or by phone at 307-632-1244.