Energy News
Swan Hills syngas plant moving forward
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- Category: News
- Written by Lynda Harrison
A $1.5-billion project designed to use in situ coal gasification (ISCG) to convert non-mineable coal into clean, low-carbon synthesis gas (syngas) needs further funding, but expects to file for regulatory approval sometime this year.
Swan Hills Synfuels is targeting a construction start in late 2012 or early 2013 for the Swan Hills ISCG/Sagitawah Power project, with an onstream date in late 2015.
The first phase of development will consist of 18 to 20 well pairs, as well as an in situ coal gasification facility, power generation, carbon dioxide transportation and sequestration, and a syngas pipeline.
The company is in the process of raising $100 million that will get the project to the start of construction, Douglas Shaigec, president of the Calgary-based company, told the Canadian Energy Research Institute 2011 Oil Conference in Calgary.
To date, investors have been high-net-worth individuals, with some participation from institutional investors, and similar sources are being tapped for further funding, said Shaigec.
The cost of the gas plant and well pairs is pegged at $600 million, which will be financed separately from the power plant’s estimated cost of about $500 million. That price tag depends on final project component siting and configuration decisions.
The power plant will be in the Whitecourt-Swan Hills region of Alberta, but the company has not yet pinpointed the exact location of the power plant and is in negotiations with stakeholders.
About $70 million has been raised within the organization so far and has largely been spent on the demonstration project and first phase of the commercial project, he said.
The demonstration project was completed in July 2009 at a cost of about $30 million, of which $8.83 million was provided by the province of Alberta through the Alberta Energy Research Institute.
Shaigec’s company estimates two billion barrels of oil equivalent can be manufactured from its secured coal resource base using ISCG. The supply cost is less than $3 per gigajoule, he told the conference.
The proposed commercial-scale project will manufacture clean fuel for a new 300-megawatt power generation facility near Whitecourt while capturing more than one million tonnes per year of carbon dioxide for sale to nearby enhanced oil recovery customers.
“I can’t give you the exact number [of producers who will use the gas], but the interest in the CO2 exceeds the available supply,” he said.
The coal seam is 1,400 metres deep at nearly 2,000 pounds of pressure per square inch, and thus not economical to mine, he said.
The demonstration project has one well pair: one horizontal well that injects oxygen and saline water while the vertical well brings the raw syngas to the surface where a conventional gas plant removes the carbon dioxide, resulting in a syngas that can be used as a fuel for power generation or further converted to liquid fuel.
The use of saline water virtually eliminates the need for fresh water, said Shaigec.
A series of chemical processes convert the coal to syngas, Shaigec told the conference. The oxygen supports a limited and controlled amount of combustion, raising the temperature of the coal and boiling the water to generate steam. The naturally existing deep underground pressure, along with the elevated coal temperature and the presence of steam, together form the right conditions to gasify the coal. Char and ash, which are remnants of the original coal, remain deep underground.
Although the company is not doing anything differently with its demonstration plant than what’s been done with the technology in its 80-year history worldwide, until that plant was operating skeptics suggested the process would not work, he said.
But Shaigec insists it absolutely does work. “In fact, we were looking forward to getting the demo operating because it is actually the deepest in situ coal gasification that’s ever been done in the world,” he said, adding that the company is seeing the benefits of syngas in both its quality and how clean it is.
“It certainly seems to support the theory and the past practice that being in the deeper coals in that high-pressure environment is definitely beneficial to the process,” said Shaigec.
The province of Alberta has committed $285 million in grant funding to support the first phase of the project, under Alberta’s $2-billion carbon capture and storage funding program.
Swan Hills Synfuels has entered into an agreement with PCL Industrial Management to construct the clean synthetic gas processing facility on a fixed-price, schedule-certain basis.
Shaigec said the area’s transmission system will be able to accommodate the interconnection of the power plant without the need for any substantive system upgrades.
The land footprint of the first commercial phase will use no more than five sections worth of land, he said.
