Siemens Energy will deliver the first two of five coal gasifiers to Shenhua Ningxia Coal Industry Group Co. Ltd. (SNCG) in China. (Earlier post.) The coal gasifiers, each with a thermal capacity of 500MW, are destined for the Ningxia coal-to-polypropylene (NCPP) plant in Ningxia Province in northwest China.

After completion in early 2010, the plant with its five gasifiers will have an hourly production capacity of approximately 540,000 cubic meters of syngas, which will then be converted in downstream processes to polypropylene plastic.

The Siemens coal gasifiers, which are 18 meters long with an inside diameter of 3 meters and weigh 220 tonnes, are among the world’s largest and most powerful. They are capable of gasifying up to 2,000 tonnes of coal daily.

In the gasification process hard coal, lignite and other substances such as biomass, petcoke and refinery residues will be converted to syngas, and environmental pollutants such as sulfur and carbon dioxide subsequently removed. The syngas can then be used for power generation in integrated gasification combined cycle (IGCC) plants or as a raw material in the chemical industry, for example in the production of synthetic fuels.

For years China has been a magnet for the chemicals industry, attracting European and American companies with its cheap production costs and growing market. Now China has another attraction for the energy-intense chemical industry: vast supplies of coal that can replace oil and natural gas as raw materials for chemical production.

In the last two years, China has built nearly 20 plants that convert coal into a gas that can be used to make such things as plastic and pharmaceuticals, according to the Gasification Technologies Council, an industry trade group. The new plants draw on technology developed by companies such as General Electric Co. and Royal Dutch Shell PLC.

Now, Western chemical firms are getting in on the action. Celanese Corp. opened a plant this year that uses coal-based feedstock to make a chemical used in paints and food sweeteners. Dow Chemical Co. has partnered with Chinese energy company Shenhua Group Corp. to study a project to convert coal into plastics. Mining company Anglo American PLC is also looking at a coal-to-chemicals project. Suppliers to the chemical industry, such as Praxair Inc., are vying to open accounts with the new coal-to-chemical plants.

"Coal to chemicals is an opportunity that"s literally exploding [in China] right now," says Timothy Vail, chief executive and president of Synthesis Energy Systems Inc., a company that builds coal-gasification plants.

Launching their own coal-to-chemicals projects in China represents one way Western companies are fighting to keep their competitive edge. In the past decade, chemicals makers based in Europe and North America have lost market share to their counterparts in Asia, where demand for chemicals is rapidly growing.

China"s government, meanwhile, has orchestrated the buildup of the coal-to-chemicals industry in an effort to reduce the nation"s growing dependence on imported natural gas. Using China"s vast coal deposits to make chemicals and plastics provides a more reliable source of raw materials that can feed the expansion of China"s main economic growth engine, its manufacturing sector. The new plants also replace older, soot-belching chemical factories that have earned the government a bad reputation for the pollution they create in Chinese cities.

Gasification technology, which uses high temperatures and pressure to break the molecular bonds in coal to produce gases that can be recombined into a variety of fuels and chemicals, has existed for more than a century. Germany gasified coal to fuel its planes during World War II. China has made fertilizers through gasification for decades. But there had been little incentive for the global chemical industry to gasify coal until prices began soaring for natural gas and oil.

Pakistan has considerable oil, gas, coal reserves; tidal, solar and hydel potential. It is ironic that Pakistan has fourth largest coal reserves in the world but it is importing 2.5 million tons of coal per annum for cement industry. At the same time, due to high cost of energy resources, the government has also decided to enhance the share of coal in the overall energy mix from 5 % to 18% up to 2018. Among the other alternative sources, coal is the man source for producing cheaper electricity and its availability is much higher. In view of anticipated shortfall of electricity and other energy resources during the next 10 years, demand for indigenous coal would grow in power generation considerably.

Pakistan has emerged as one of the leading country - seventh in the list of top 20 countries of the world after the discovery of huge lignite coal resources in Sindh. The economic coal deposits of Pakistan are restricted to Paleocene and Eocene rock sequences. Economists say that the energy demand over the next 5 years is expected to grow at a rate of 7.4 % per annum. It may be noted that in India the share of coal is as high as 54.5% in the total energy mix. To meet the future requirements of the country with indigenous resources, domestic exploration would have to be intensified to increase the share of coal from 5 to 25% by 2020. The GSP’s workshop provided a platform to highlight the role of the indigenous resources in the national economy especially in energy and industry.

Coal -the black gold, is found in all the four provinces of Pakistan. Country has huge coal resources, about 185 billion tons, out of which 3.3 billion tons are in proven/measured category and about 11 billions are indicated reserves, the bulk of it is found in Sindh province. The current total mine-able reserves of coal are estimated at 2 billion tones (60 % of the measured reserves). The speakers at this moot enlightened the audience with the importance of Thar coalfield and its development and utilization as less expensive fuel for power generation and other process industry. Because of Thar coal’s extraordinary importance for power generation, industrial development and economy, Sindh government and GOP are making all out efforts to develop this huge deposit for power purpose. It is one of the world’s largest lignite deposits discovered by GSP in 1992, spread over more than 9, 000 sq. kms. comprise around 175 billion tones sufficient to meet country’s fuel requirements for centuries.

Advisor to Chief Minister on Mines and Mineral Department Dr. Khato Mal Jeewan while talking to The Nation said the Sindh government had invited proposals from companies interested in a project of open cast mining in Thar coalfield in a joint venture with equity participation of provincial government.

The provincial government made mandatory that preference would be given to those companies with sound financial position of at least US $ 200 million dollars in paid-up capital, and those which are dovetailed with power project of at least 1000 MWs. Advisor said the Board of Directors of Sindh Coal Authority will look into the offers submitted in return of invitation of provincial department and than short listed.

He did not confirm the acceptance of the offers of two national and international companies but said both are financially sound and well reputed firms. Dr. Khato Mal pointed out that PML-Q led previous provincial government without getting approval of Board of Directors of Sindh Coal Authority, had signed MoUs with 8 national and international firms for mining and other studies of coal reserves in Thar.

Out of 3-4 companies, the majority of them did not fulfill the requirement which they signed in Terms and References, Advisor said, informing that notices have been issued to those companies which proved default in fulfilling the TOR.

He alleged that Wapda, NEPRA, oil and generators’ importers mafia was the main hurdle in utilization of coals of Sindh because they are making billion of rupees profit in this business.

Referring to the recent studies of USA and other international companies which are working on coal mining in Thar, Dr. Jeewan said the utilization of only 25 billion tons of coal could fulfill the energy requirements of the country for next 200 years. He further said that Sindh had at least 175 billion tons lignite/coal reserves only in Thar but the Wapda and oil importers’ mafia making hurdles for delay in implementation of coal based power project.

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