Challenges and opportunities for coal gasification in developing countries | IEACCC Webinars

Introduction

The introduction provides an overview of the webinar and introduces the speaker.

Welcome to the Webinar

• Deborah Adams welcomes viewers to the IEA Clean Coal Centre's monthly webinar.

• The webinars are based on technical reports available from their website.

• Members of member countries and employees of sponsoring organizations can download reports at no charge after a one-off registration.

About Today's Webinar

• Today's webinar is presented by Dr. Andrew Minchener, General Manager at IEA Clean Coal Centre.

• The topic is "Challenges and Opportunities for Coal Gasification in Developing Countries."

• Dr. Minchener's report on this subject is available now from their website.

Study Overview

This section provides an overview of the study on coal gasification challenges and opportunities for developing countries.

Scope of Presentation

• Dr. Minchener discusses a study recently issued by IEA Clean Coal Centre.

• The study covers coal gasification challenges and opportunities for developing countries.

• There is a wealth of detail in that report, but he will cover some aspects during this presentation.

Coal Chemical Industry Supply Chain

• Gasification-based coal conversion offers an effective way to monetize lower value coals into higher value products.

• Synthesis gas (primarily carbon monoxide and hydrogen) can be processed into fertilizers, polyesters, synthetic natural gas, alternative fuels like dimethyl ether or even synthetic oil which can then be processed further to make gasoline or diesel fuels.

Barriers to Coal Conversion Projects

This section discusses some barriers that must be surmounted when considering coal conversion projects.

High Capital Investment

• The high capital investment needed up front to establish the conversion process is a significant barrier.

• These processes are best benefited from economies of scale that will allow you to ideally build unit large-scale units which are going to require considerable investment for a plant that could be there for maybe 50 years operation time.

Cost of End Products

• You have to be mindful of the cost of the end products in sense that you can accurately predict the cost of the end products from your own process but at the same time there will be competing processes available maybe using oil and gas as the initial feedstock.

• The prices of those two materials (oil and gas) can be very volatile, and this can mean that over a long lifetime of the plant, the coal product process could be viewed as a difficult investment.

Prerequisites for Coal Conversion Projects

This section discusses prerequisites for assessing potential coal conversion projects.

Large Reserves of Low-Cost Coal

• First and foremost, you need large reserves of low-cost coal that can be gasified to support very large coal-to-chemical gases and liquid fuel projects.

• In an ideal situation, this should be stranded coal either due to its low quality or location which can make it unsuitable to be utilized effectively and efficiently for any alternative applications.

Government Support

• A government's ability and indeed will to provide enabling support for the very large capital investments is crucial.

• Governments may well drive these projects forward.

Considerations for Coal Conversion Projects

This section discusses the considerations that need to be taken into account when investing in coal conversion projects.

Factors to Consider

• In countries with both indigenous supplies of coal and active oil and natural gas industries, it may be more cost-effective to invest in expanding the oil and natural gas activities rather than picking up on coal.

• Technical and economic issues need to be addressed to ensure acceptable utilization of coals for gasification applications.

• The gasification products that would most benefit the national economy should be considered, perhaps in terms of usage within the country itself or in the production of exportable products.

• Infrastructures required for these projects, both for the supply of feedstocks and transporting end products either within the country or for export activities, should be looked at.

• Institutional capacity requirements such as workforce capability to support gasification plant construction and operation should also be considered.

Developing Countries Active in Coal Conversion Projects

This section looks at developing countries that are currently active in coal conversion projects.

Countries Currently Active

• South Africa has been operational with coal chemicals coal conversion for many decades.

• China has had a massive development of a coal conversion industry over the last 10 years.

Countries with Potential but not Realized

• Indonesia, India, Pakistan, Botswana, Zimbabwe all have significant potential for coal conversion but lack a coherent government vision and enabling environment to encourage inward investment.

Countries with Significant Potential

• Mozambique, Mongolia, Ukraine, Turkey, and Vietnam are all very suitable for coal conversion instruction.

Example of Coal Conversion Projects in Developing Countries

This section provides examples of coal conversion projects in developing countries.

Mongolia

• Mongolia has massive deposits of coal and considerable water available.

• There is a strong driver to establish some means of converting coal to oil and gas products on the grounds of energy security.

• The country could supplement or replace imports with synthetic fuels along the lines already indicated.

Coal Conversion in Different Countries

This section discusses the potential for coal conversion projects in different countries, including Mongolia, Mozambique, Ukraine, and China.

Mongolia

• Coal conversion projects could be made from indigenous lignite sources within the country.

• Limited technical and economic capacity within the country may require external financing.

• Mongolia is seen as a risky investment at least in the mining sector.

Mozambique

• Coal reserves have been discovered and are starting to be exploited by international companies.

• There is a market for coal-to-liquid products both domestically and for exports.

• Lack of technical and economic capacity may require external financing.

• Offshore natural gas finds may make coal-to-liquids less attractive.

Ukraine

• Major coal reserves are suitable for use in gas conversion processes.

• The economy is too highly dependent on imported natural gas and oil at present.

• Large-scale coal gasification to synthetic natural gas plants could cut costs of gas production by about 50%.

• The government has signed a deal with China to design and supply five coal SNG plants.

China

• Establishing a modern coal chemical industry through development and demonstration projects.

• Upgrading demonstration projects to pick winners that offer higher energy conversion efficiency, suitable geographical location, sufficient water availability, and prospects for extending the industrial chain to promote local economic development.

• Focus on clean production utilization processing and conversion of low calorific value coal.

Different Coal Conversion Techniques

This section discusses the technical and economic viability of different gasification technologies for converting coal into chemicals and synthetic fuels.

Gasification-Based Coal Conversion Plant

• The China Development Bank has issued generic numbers comparing the cost of making a barrel of crude oil using a gasification-based coal conversion plant to a non-gasification process.

• If oil prices are above $100/barrel and coal is no more than $100/ton, there would be a comfortable financial operating margin for the gasification process.

• In China, these processes are probably financially viable.

Environmental Aspects

• It takes many tons of coal to make one ton of end product in synthetic oil, olefins, and ethylene glycol production.

• Water consumption on a tonne basis is high, especially in arid regions where much of the coal resources are located.

• The government encourages water site recycling techniques while pushing energy and carbon intensity limits to meet its internal sustainability agenda.

Coal-to-Chemicals Program

• China aims to increase clean energy use and cut overall CO2 emissions within the economy by scaling up large-scale coal-to-synthetic natural gas processes.

• They're also looking at other techniques that might be appropriate for cold to glycol or cultural arithmetic processes.

Introduction

The Chinese government has a plan to ensure that natural gas comprises 20% of the energy mix by 2020. This will be achieved through a combination of supplies of natural gas from domestic deposits within the country, imports of natural gas by pipelines from other countries, and possibly coal bed methane extraction and shale gas.

Coal to Synthetic Natural Gas

• There are about 14 big processes under demonstration plants being built.

• Coal to synthetic gas is seen as critical to ensure that the 20% target is met at least in this near to medium term.

• A list of coal to SNG projects that are coming online or at least the first phase will come online in all cases by 2016.

Project Owners

• Many companies represent power coal oil and gas companies and what they're doing is diversifying from their core businesses to become broad-based energy companies.

• Examples include Da Tang Huang Guadian, Cole CPIC, Shimwa, Cylopec, and Canuck.

Coal Wallopings

This section discusses another growth area within China - coal wallopings.

Shimwa Baltau

• Produces about one and 1.8 million tons of methanol a year which is then converted into produce something over six hundred thousand tonnes a year of polypropylene and polyethylene which is used in the polyester businesses.

• Product quality is acceptable at the lower end of the market range but there's a need for further development work if they're going to get to the upper quality range which is going to require the introduction of more highly efficient catalysts and some adjustments to the processes to ensure full operational stability.

Gasification

This section discusses gasification in China.

Gasifiers

• A wide range of gasifiers have been established, most are in train flow systems but there are also a few fixed and fluidized bed units in operation.

• The leading technology supplier is Ecos East China University of Science and Technology which has developed its technology with industrial partner as it shows here it's building some particularly large units up to 3,000 tons a day gasifier units.

• The list down the left-hand column shows the technologies that have been established in China.

Overview of Coal Gasification for Monetizing Low-Grade Coals

In this section, the speaker discusses the trend of domestic manufacturers supplying newer orders in coal gasification. The number of projects has risen significantly in a short period of time, and the complexity of these projects has increased. The speaker also touches on carbon capture and storage (CCS) and its potential to reduce costs.

International Suppliers vs Domestic Manufacturers

• International suppliers like General Electric and Shell are market leaders from an operational perspective.

• Majority of units under design and construction will be supplied by domestic companies.

• Clear trend that is continuing to develop.

Rise in Number and Complexity of Projects

• Significant rise in number of projects in a short period of time.

• Complexity of projects has increased significantly as well.

• Older projects may have comprised one gasifier unit with 500 tons per day coal input, while newer equivalent projects may comprise six or eight gasification units each with a capacity of 3,000 tons.

Carbon Capture and Storage (CCS)

• CCS is important to consider for this sector since it currently uses about 170 million tons/year.

• Nature of gasification process means there is a concentrated CO2 waste stream that can be compressed supercritical state and transported away.

• Cost for capture stage is about 80% overall CCS costs; reducing this cost could be possible due to inherent capture cost within the process itself.

• Likely CO2 emissions on an annual basis from individual projects are significant, but comparative costs for CO2 capture from these processes are likely to be quite small.

Conclusion: Coal Gasification's Role in Developing Countries

In this section, the speaker concludes by discussing coal gasification's role in developing countries and the challenges associated with establishing projects in these regions. The speaker also emphasizes China's critical role in providing technical expertise and financial support for such projects.

Coal Gasification's Role in Developing Countries

• Coal gasification can fill an important need for monetizing low-grade or low-rank coals to produce chemicals and use gaseous/liquid fuels.

• Particularly important in developing countries where coal is the primary fuel source available and oil/gas energy security is an issue.

Challenges of Establishing Projects in Developing Countries

• Establishing projects in many developing countries can be problematic due to technical and economic reasons.

• Encouraging that some of these projects are moving forward, particularly in the Asian region.

• Role of China is likely to be critical since it can provide technical expertise and financially underpin such projects, including associated infrastructure needs.

Carbon Constrained Situation

• Other issues arise when looking forward to a carbon constrained situation.

• Comparative costs for CO2 capture from these processes are likely to be quite small.

• Some early demonstrations being considered by Chinese government on larger coal conversion units.

Establishing Technology in Pakistan and China

The speaker discusses the challenges of establishing technology in Pakistan and China, including issues related to water quotas and recycling operations. They also touch on the potential for underground coal gasification (UCG) in China.

Challenges of Establishing Technology in Pakistan and China

• Difficulties associated with establishing technology in Pakistan due to various issues.

• Water quotas and recycling operations are important considerations when establishing technology in arid areas like northern China.

• UCG is a promising technology for extracting energy from coal without mining, but it has not yet been fully developed.

CO2 Capture and Storage in China

The speaker discusses the potential for CO2 capture and storage (CCS) in China, including the focus on utilization rather than storage of CO2.

CCS Potential in China

• Gasification process lends itself well to CCS.

• Focus on utilization of CO2 for enhanced oil recovery applications rather than storage.

• CCS may not be a long-term solution due to small, heterogeneous oil fields that make storage more expensive.

Capital Costs and Cost Estimates

The speaker addresses questions about capital costs for CTX plants as well as cost estimates for SNG production in Ukraine and Mongolia.

Capital Costs and Cost Estimates

• Cost estimates for SNG production in Ukraine and Mongolia are not publicly available at this time.

• Capital costs for CTX plants will vary by site and country. Costs may be lower in China due to lower cost of living and standardized end products.

Comparison of LNG and other gas options

In this section, the speaker compares LNG with other gas options and discusses which option is more attractive for China.

Comparing LNG with other gas options

• LNG is less attractive than other gas options.

• The overall cost of LNG is higher than that of other gas options.

• There is limited information available on the costs of real projects.

Water consumption in coal conversion projects

In this section, the speaker discusses water consumption in coal conversion projects and advises on which product is advisable for a water-scarce country.

Water consumption in coal conversion projects

• Olefins consume more water than SNG.

• The choice of product depends on the rationale behind establishing a coal conversion project rather than its water consumption.

Conclusion and Next Steps

In this section, the speaker concludes the webinar and provides information about next month's webinar.

Conclusion and Next Steps

• The PowerPoint presentation will be available to download from the webinar page later today.

• The next month's webinar will be presented by the speaker on biomass sustainability for co-firing.