Gas from Coal: Who will benefit

In the early summer of Ukraine refused to build a coal gasification plant, which planned to build at the expense of the Chinese loan of $ 3.6 billion. First, the Ministry of Energy and Coal Industry said that the project is hopeless. And then Prime Minister Yatsenyuk, speaking in the Verkhovna Rada, called it "inappropriate": "The so-called coal gasification project lacked a economic or technological base." In Minenergouglya decided that the loan funds must be spent on other projects, and now they are experts in finding such projects, which will be effective and will be able to pay off.

In December 2013 "Naftogaz of Ukraine" has signed a loan agreement with China Development Bank (China Development Bank Corporation) to attract $ 3.656 billion under the state guarantees for projects from gas to coal - coal-water fuel technology and construction of coal gasification plants.

The credit line - 19 years, the cost of service - $ 2.396 billion. Plants for the gasification of lignite and hard coal to be built in Lugansk, Donetsk and Odessa areas of technology Shell, tested in China.Implementation of the project would allow Ukraine to save annually up to 4 billion cubic meters.meters of natural gas, provide a market for 10 million tons of coal and create more than 2,000 jobs.Start of construction was scheduled for September 2014.

Today, in connection with the termination of gas supplies from Russia, Ukraine just needed an alternative. Forbes found that coal gasification technology known Ukrainian scientists. The Institute of Coal Energy NASU this trend began to develop in the early 90s of the last century. There's even a experimental facility with capacity of 100 kg of coal per hour. More than 20 years ago, it was a good level of technology even in the international scientific standards. However, money for research work is not allocated, so the transition to industrial scales were frozen.

"Coal gasification will still be in demand in Ukraine, as it is one of the ways of reducing dependence on imported gas. Academy of Sciences and our institution - the patient, we will consistently explain officials and businessmen benefit from the implementation of this direction in Ukraine ", - saidAlexander Topal, head of the department of combustion and gasification of coal Coal Energy Technology Institute of NASU, PhD.

Scientist agreed to answer a few questions Forbes.

Alexander Topal

- Why, in your opinion, the Ukrainian government abandoned the project of construction of plants for the gasification of coal at the expense of the Chinese loan?

- I think that the main reason for refusal was unsustainable conditions of the loan agreement. The text of the agreement was kept secret, he saw only a few officials. But the service credit - $ 2.4 billion, despite the fact that the loan itself $ 3.6 billion, but still under the state guarantees - a bit too much.In addition, too frequent changes of managers Minenergouglya not give officials time to understand any of the technology itself, nor what the final product in the end they want to get in the process of coal gasification, and to whom he will - for state-owned enterprises or private.

- Allegations that there is no such technology is gasification. This is true?

- Gasification technology on an industrial scale practiced for over 20 years. The construction of large industrial facilities took place in the early 90s, the three major demonstration unit of 200-300 MW of electrical power in the US alone. Today, coal gasification plants there and in Western Europe, for example, in the Netherlands - Station Buggenum, and in China. A total of gasifiers in the world built more than 500. The development of coal gasification engaged in solid American companies General Electric (process Texaco), E-Gas, Kellog-Brown-Root (KBR, gasifier TRIG), as well as European companies, for example, Shell - known English -Dutch group, which put a large number of industrial gasifiers in different countries of the world. The German company Siemens is supplying gasifiers for the same China.

US Department of Energy (the equivalent of our Minenergouglya) and the National Power Technology Laboratory (National Energy Technology Laboratory - NETL) are developing technology and continuously update the largest database of industrial gasifier. This information is available on many specialized websites.

- How much of the final products can be obtained by gasification of coal?

- Simplify the process of obtaining such chemical products. During the gasification of coal in the gasifier, the crude synthesis gas. Then it is cooled and purified. After that, a special complex processing of synthesis gas can be obtained various chemical products: ammonia, fertilizers, methanol, gasoline to substitute natural gas (or SNG - substitute of natural gas). The composition of these complexes and the cost of the gasification plant depends on the desired product. In my opinion, for example, it would be very advantageous to integrate into existing gasifiers chemical plants for the production of fertilizers.

- Why for chemical companies is the best option?

- Natural gas, which they receive, it is methane - CH4. At the chemical plant spread on its components: carbon monoxide (CO) and hydrogen (H2), and have already "collected" urea or ammonia fertilizers.

Produced gasifier synthesis gas contains 85% (by volume) of the target component - the same H2 and CO. Further increases in the proportion of inexpensive reactor H2, and then one can "gather" the desired chemical products, including fertilizers, the existing processing chain. Of course, the coal must be previously prepared (grind, dry), and the resulting synthesis gas is cleaned from sulfur compounds. But at the same time as trade-products you can obtain elemental sulfur or sulfuric acid, which can be sold.

Today, per tonne of ammonia is 1250 cubic meters of natural gas. With the price of Russian gas $ 350-500 per 1 thousand. Cube ammonia production is not profitable, and chemical plants will be shut down. At the same time now there is a problem with the sale of Lvov-Volyn coal gas. This coal after enrichment could be gasified, a gasification plant to integrate, for example, chemical plants PAO "Rivneazot" and there produce fertilizer. Would then be provided with stable sales Lvov-Volyn coal in large quantities (almost the entire volume produced in the Lvov-Volyn coal basin).
Implementation of the project would carry symbolic as it is adopted and implemented in the US and Western Europe in the implementation of innovative projects. Plant with the 3000th team did not threaten to close, as well as the miners and the coal beneficiation plant local region appeared to long term development.

- And what is the ratio of the volume and price of coal / gas?

- In this case we should have news of substitute natural gas (SNG - analogue of imported Russian gas). It is important not to confuse it with a synthesis gas from the previous example, since the production costs of a synthesis gas and capex several times. Indicative figures are: to produce 1 thousand. Cube SNG need about 2.5 tons of our coal average quality. And more should be considered: for example, if the selling price of the coal is about $ 80-90 per tonne, in terms of costs derived fuel component - $ 200-225 per 1 thousand. Cube SNG.

Clearly, this is not all of the costs, and there is the cost of operation and maintenance of equipment (including salary, etc.). But even in this case the value SNG can not exceed $ 260-280 per 1 thousand. Cube. m. It is also clear that with the cost of coal production is not so simple: someone produces efficiently, and somebody needs subsidies.

The biggest margin, according to our rough calculations, it turns on the production of gasoline: per ton of A-95 goes from 4 to 6 tons of coal. There is some interest in the production of gasoline in such a way and in Ukraine. By the way, this technology is well developed, at least remember the well-known firm Haldor Topse and Exxon Mobil.

- How much is the purchase and installation of equipment for coal gasification?

- Coal gasification technology is well developed on a commercial scale in the world for large-scale production. In Ukraine, there is the brand of coal, which is quite suitable for gasification, mainly coal and lignite. Unfortunately, the implementation period of the project - about three years, as well as any other large-scale energy technology object. The cost of the project can be called only after a clear definition of the target market product. If we buy a gasifier and installation works, sewage treatment plant and ancillary chemical complex do themselves, it is between $ 40 million. If we do a full cycle, the so-called "green area", that is the level of $ 450 million for the processing of 600 thousand. Tons of coal year.

Gasification technology is complex but multifaceted complexity of production. But almost the entire chain, except for the gasifier, in Ukraine there is a well developed. Fuel - typical, it is used in all of our thermal power plants and coal-fired power units. Catalysts for the chemical process, we also produce another thing that Western companies are better. Oxygen plant, which is included in the scheme of gasification, in principle, Ukraine is able to produce itself. Everything depends on what is needed purity oxygen - or ultrahigh a 95% conventional, so-called technical oxygen. In fact, we only need to buy the gasifier.

- And so nothing to buy, and produce at the equipment, can we?

Alexander Topal

- I know that many foreign companies are ready to localize production in the territory of Ukraine for their licenses. This is not some kind of a super setting. Typical gasifier - a cylindrical pressure vessel 4 m in diameter and 12-16 m in height, weighing about 200 tons. Yes, this vessel should operate under pressure - about 40 atm. And the temperature process - 1450-1600 C. However, almost all of our large firebox boilers operate at a temperature such as vessels designed for much higher pressure, has long been produced Ukraine.

Furthermore, many foreign investors are willing to invest their billions in resources, because they see the benefit in the implementation of gasification technologies in Ukraine. They do not need any loans, they are ready to attract Western investment here.But they need some assurance that there will be long-term contracts will be long-term supply of coal, because gasifier expect to work for 20 years. During this time, you can safely return all bank loans. In principle, all very good from the calculations.

- And yet, perhaps, under some conditions it is possible to supply the gas from coal for thermal power plants for heating?

- You know, to put next to the CHP gasifier or boiler to produce a first synthesis gas, then through a special complex process it into a substitute for natural gas, and then these power plants and 100 thousand leaky boiler to generate heat, for which the population in the end did not pay - well, quite impractical. Gasification - is not a panacea, it is one of systematic measures that will reduce dependence on imported gas. Today boiler that runs on gas burning should simply be transferred to coal. We propose to introduce the technology of coal combustion in a circulating fluidized bed, which allow to burn coal with an ash content of up to 40% without any gas lighting. This technology is optimal for our high-ash coal and worked on an industrial scale in the world. Now many are considering CHP this technology in the transition from the combustion of natural gas to coal.

Of course, if the price of gas will be $ 500 per 1 thousand. Cube, and Russia in general cease his delivery, can, and should consider establishing systems for the production of substitute natural gas (SNG) with the possibility of injection into gas storage facilities and complexes themselves placed next to them. Note that the production of SNG produced additional electricity that can be dispensed to the side and used for the same pumping stations, where there is such an opportunity.

However, our source said that government officials must determine whether the gasification of coal a national priority (including, of course, important measures to increase domestic production, energy saving, replacing it with a CHP by burning coal and other measures), or question the use of natural gas - it is a problem of private companies that require it.

The fact is, says Alexander Topal that Ukraine imports about 30 billion cubic meters of gas per year. But this gas is distributed as follows: 4 billion cubic meters go to the technological needs; 8.3 billion cubic meters - to the needs of the domestic sector, including heating, and these volumes Ukraine is unlikely to quickly replace the gas alternative. Of the remaining approximately 18 billion cubic meters - 5.5 billion cubic meters of chemical industry consumes the rest - metallurgy, energy, construction and other industries. All of them are mostly in private hands. And, perhaps, to save the jobs at these companies the state should facilitate the introduction of coal gasification technology, where appropriate - for example, through public-private partnerships or other preferences.