Jul 24, 2009 Reuters
POSCO, SK Energy to
invest for coal conversion
* Both to co-develop Korea's first coal conversion technology
* POSCO to invest 1 trln won by 2013
* SK Energy to spend 2.35 trln won by 2018
South Korea's POSCO and SK Energy will spend 3.35 trillion won ($2.69 billion) to convert coal to synthetic natural gas, chemicals and liquid for the first time in Korea to reduce its oil and gas imports, joining oil majors in investing in such new technology.
POSCO and SK Energy are major oil and gas consumers in South Korea, the world's fifth-largest crude and second-largest liquefied natural gas buyer.
The government wants to boost the economy by creating new jobs in the carbon-reduction sector, and has set aside separate financing of 25 billion won for the POSCO and SK Energy projects.
"With growing energy
demand worldwide, I suppose this is another route to diversify
energy supplies and is becoming more popular," said Lachlan
Shaw, a commodities analyst at Commonwealth Bank of Australia.
POSCO, the world's No.6 steel maker, with spending of 1 trillion won through 2013, will develop related technologies and build a plant in Gwangyang 光陽, southwest of Seoul. It will produce 500,000 tonnes of synthetic natural gas a year and create over 300,000 jobs a year, the company said in a statement on Friday.
POSCO expects its products to replace annual imports of 200 billion won of liquefied natural gas (LNG).
SK Energy, the country's No.1 oil refiner, with investments of 550 billion won through 2013, will develop coal-to-liquid technologies and build production facilities in Ulsan, southeast of Seoul. The plants will produce annually 200,000 tonnes of chemicals including methanol and hydrogen, and to replace petrochemical feedstock naphtha, the Korean government said in a separate statement on Friday.
From 2014 through 2018, SK Energy will invest 1.8 trillion won to build a plant with an annual capacity of 6.3 million barrels of gasoline, or about 2.5 percent of Korea's fuel demand for transportation in 2008.
The plant will be built near a low-cost coal mine overseas.
"The coal-to-liquids technology has been around since World War II ... so as a technology, it has been around for awhile. But there are a range of factors that will determine whether or not it is viable, such as geology and accessibility of the mines," said Shaw.
The world has only one commercial synthetic natural gas plant in the United States, the Korean government statement said, citing the business as a future growth area.
South Africa's Exxaro Resources this month said it had formed a joint venture with Sasol, the world's largest maker of motor fuel from coal, to build a new coal mine to supply Sasol's proposed 80,000 barrels per day coal-to-liquids project.
Australia's Linc Energy and China's Xinwen Mining Group also have been developing gas resources from Chinese coal deposits and building a synthetic diesel plant in Queensland state using coal.
Three Coaｌ-to-olefins (CTO) projects including
包頭神華石炭化学(Baotou Shenhua Coal Chemical Company)
神華集団 76%/上海華誼集団公司 24%
In Feb 2009, Shenhua Baotou 1.8Mt/a coal-based methanol to 600kt/a olefins project was listed in China's Petrochemical Stimulation Package. This project and another two CTO units, by Datang Duolun and Shenhua Ningxia Coal respectively, are expected to start up in 2009 and 2010 successively.
Total is interested in CTO project investment in China
Total Inaugurates Demonstration Unit Signaling a New Direction in Plastics Production
At its petrochemicals complex in Feluy, Belgium, Total today inaugurated a demonstration plant intended to produce olefins and polyolefins from methanol. The integrated unit is the world's first application of an innovative technology that helps to diversify the source of plastic feedstock.
The inauguration was attended by Jean-Claude Marcourt, Minister for Economy, Employment and Foreign Trade for the Belgian region of Wallonia, Francois Cornelis, Vice Chairman of the Executive Committee and President of Chemicals at Total, and Jean-Francois Minster, Senior Vice President, Scientific Development, Total.
Worldwide, the petrochemicals industry currently relies on oil and natural gas derivatives, naphtha or ethane, to produce olefins. These are subsequently converted into polyolefins, the raw material for plastics.
The pilot plant at Feluy was designed to assess, on a quasi-industrial scale, the technical feasibility and cost effectiveness of two integrated processes that produce olefins and subsequently polyolefins from methanol, which can be obtained from natural gas, coal or biomass. First, the UOP*/Hydro Methanol To Olefins (MTO) process converts methanol into light olefins (ethylene and propylene) and heavier olefins. The heavy olefins are in turn converted into light olefins, more specifically into propylene, via the UOP/Total Petrochemicals Olefin Cracking Process (OCP). All of these olefins are then converted into polyolefins at the existing pilot polymerization unit located nearby, at Total's research center in Feluy.
Requiring a Euro45 million investment, the new MTO/OCP unit is a major technological and strategic project that will help Total to meet two key challenges. First, it will enable the Group to diversify its sources of petrochemicals feedstock, by reducing its dependence on oil. Second, the integrated unit will increase propylene yield, which is a major market advantage at a time of strong international demand for polypropylene.
"Given that energy demand will continue to grow, petroleum supply will be tight and the prices should stay at a high level, we firmly believe that the methanol to olefins process will play a vital role in the production of petrochemical products in the future," said Francois Cornelis. "Integrating the methanol to olefins and olefin cracking processes makes it possible to produce light olefins at a very reasonable cost."
* UOP is a subsidiary of the Honeywell Group.