Recent high prices for crude oil and natural gas (outside the US) are spurring increased interest in other conversion technologies, such as coal gasification, to process lower-value hydrocarbon feedstocks into higher value end products.1 Fig. 1 compares the projected prices of crude oil, natural gas and low-rank coals.1,2
Fig. 1. Projected price comparisons for crude
oil, natural gas and low-rank coal.
Liquid fuels, including gasoline, diesel, naphtha and jet fuel, are usually processed by refining crude oil. Due to the direct distillation, crude oil is the most suited raw material for liquid fuel production. However, with rising crude oil prices and depleting reserves, gas-to-liquids (GTLs) and coal-to-liquids (CTLs) processes are alternative routes used for liquids production. Natural gas and coal are converted to syngas first, and then the well-proven Fischer-Tropsch (FT) technology is used to convert the syngas to a raw product, which is further upgraded to produce primarily premium diesel, naphtha and jet fuel.
Commercial GTL plants have been operating successfully for many years at various parts of the world, as shown in Table 1. However, the scarcity and premium prices of natural gas at certain geographical locations make coal gasification an economically viable alternative route. Due to faster depleting natural gas reserves and more abundant coal reserves, coal gasification and CTL are solutions to produce liquid fuels over the long term.
Fig. 2 compares the proven reserves of crude oil, coal and gas worldwide.3 It has been estimated that there are over 847 billion tons of proven coal reserves. Accordingly, there are enough coal supplies to last nearly 118 years at present production rates. In contrast, proven oil and gas reserves are equivalent to around 46 to 59 years at present production levels.
Fig. 2. Global proven reserves of crude oil,
coal and natural gas.
Coal reserves are available in almost every country worldwide, with recoverable reserves in 70 countries. The largest reserves are in the US, Russia, China and India. With faster depleting reserves of oil and gas, coal presents an attractive alternative option for making liquid fuels. A new proprietary coal gasification technology uses an advanced design gasifier.a This article integrates technology for coal gasification with FT synthesis and product upgrading units.
Maturity of FT technology
FT technology is a well-proven, mature process, and it is used to convert syngas into clean, high-quality liquid fuels, including ultra-clean diesel and jet fuels. Depending on coal quality and process technology, the CTL process can also yield quantities of naphtha and ammonia as byproducts. The FT process produces superior quality diesel that has virtually no sulfur (< 5 ppm), is very low in aromatic content (< 1%) with a high cetane number (> 70) and good cold-flow characteristics (< 5°C10°C).4
The FT-derived diesel can be used as blendstock against high-aromatic, low-cetane No. 2 heating oil at a ratio of 1/1 to make onroad diesel. The produced naphtha is highly paraffinic with very low-sulfur, naphthenic and aromatic content; it is suitable as a quality feedstock for conversion into other fuels or cracked to produce ethylene for the polymer industry. Fig. 3 shows the FT process, which has three main processing steps, all of which are commercially proven.5 Table 1 lists successful applications of FT technologies in existing commercial CTL and GTL plants.
Fig. 3. Main processing steps of FT process.
Variety of liquid products from coal
In addition to synthetic oil and diesel fuels, numerous additional products can be derived from coal, as listed in Fig. 4.6 The CTL process can provide several key benefits, such as:
Fig. 4. Variety of liquid products from coal
- Yielding ultra-clean, sulfur-free and low-particulates products
- Processing at low levels of oxides and nitrogen
- Reducing carbon dioxide (CO2) emissions through carbon capture and storage (CCS)
- Yielding a coal-derived diesel that can be used as clean transportation fuels
- Using low-cost coal that is available domestically in appropriate geographical regions.
Fig. 5 illustrates the CO2 emission reductions with CTL diesel through CCS. CO2 emissions are reduced by 5%12% for CTL diesel with CCS when compared to diesel produced from crude oil.
Fig. 5. Well-to-wheels emissions of CO2 from
Geographical regions worldwide for CTL
There are numerous CTL projects worldwide, and Fig. 6 provides a broad overview of these various CTL projects. Blue-coded locations denote CTL plants in operation, and green-coded units are projects underway. From Fig. 6, it is noted that the majority of CTL projects are concentrated in Asia-Pacific with a significant presence in China, India and Indonesia. There are five operating CTL plants in China (Yitai, LuAn and JMG are semi-commercial) and two plants in South Africa. There are three CTL projects in India, five in Australasia (Australia and New Zealand), and one in Canada.
Fig. 6. CTL plants and projects worldwide.
Global liquids production
Fig. 7 shows the projection from 2009 to 2035 in liquids supply and demand by region.1 From Fig. 7, the Organization for Economic Cooperation and Development (OECD) includes developed nations, while non-OECD includes developing countries. Total use of liquids is similar in the reference, high-oil-price and low-oil-price cases, ranging from 108 million bpd (MM bpd) to 115 MM bpd in 2035, respectively. Although total gross domestic product (GDP) growth is assumed to be the same in all three cases, non-OECD GDP growth is lower in the low-oil-price case and higher in the high-oil-price case, thus changing the shares of global liquids consumed by OECD and non-OECD countries among the three cases. In the reference case, OECD liquids consumption grows to 47.9 MM bpd, while non-OECD liquids use grows to 62.9 MM bpd, in 2035. Fig. 8 shows the projection in unconventional liquids as a share of the total global liquids projection.1
Fig. 7. Global liquids supply and demand by
Fig. 8. Unconventional liquids as percentage of
total world liquids.
Global 2009 production of liquid fuels from unconventional resources was 4.1 MM bpd, or about 5% of the total liquids production. Production from unconventional sources grows to 10%, 12% and 17% of total world liquids production for the low-oil-price, reference and high-oil-price cases, respectively. The increased unconventional production in the high-oil-price case is supported by CTL and GTL technologies becoming more economical. Production levels from unconventional sources such as CTL and GTL are driven largely by price level and the need to compensate for restrictions on economic access to conventional liquid resources in other nations. Fig. 9 shows the projected unconventional liquids production by fuel type.10
Fig. 9. Projected unconventional liquids
production by fuel type.
From Fig. 9, the projections in unconventional liquids produced from coal tremendously increase from 2008 to 2035. Fig. 10 shows FT liquid fuels production 1990 (historic) to 2030 (projected).11 At high oil prices, CTL looks particularly attractive in countries possessing abundant coal reserves, large energy requirements and inadequate reserves of crude oil and natural gas. From Fig. 10, it is expected that CTL liquid fuels production will be preferred over GTL.
Fig. 10. FT liquid-fuels production.
Most of the announced, commercial-scale CTL projects are in China, as shown in Fig. 11.11 With completion of these announced projects, China will be the world CTL leader within the next decade. Many projects are designed to coproduce chemicals, including ammonia. The longer-term development of a global CTL industry may depend on advancements in CO2 sequestration that allow projects to produce fuels with a lower carbon footprint.
Fig. 11. FT liquid-fuels production from CTL
Fig. 12 is a block-flow diagram of an advanced CTL process. It uses a proprietary gasifier that is integrated with typical FT synthesis and upgrading units.a The gasifier is compatible with a wide range of feedstocks, particularly low-rank coals with high moisture and ash content. This CTL process is briefly summarized here:
Fig. 12. Block-flow diagram of CTL process.
Coal preparation. Dried, pulverized coal is fed to the pressurized gasifier unit through a system of lock hoppers. The coal feed fluidizes as it enters the gasifier.
Air separation unit. The proprietary CTL process uses oxygen (O2) provided by a cryogenic air separation unit (ASU) as the O2 in the gasifier.
Coal gasification. Dried, pulverized coal, oxygen and steam are fed to the proprietary gasifier; coal gasification reactions occur in the resulting fluidized bed in the high-velocity transport regime. Steam is added to the gasifier, both as a reactant and as a moderator to control the reaction temperature at about 980°C.
Gasifier ash removal system. A proprietary continuous coarse ash depressurization (CCAD) system withdraws the coarse ash from the gasifier and maintains the solids level within the desired range. The ash withdrawn is cooled with boiler feedwater (BFW), depressurized continuously through a number of stages of pressure-letdown devices and routed to an ash silo.
Syngas cooling. The hot syngas exiting the gasifier is cooled in the primary syngas cooler with BFW to produce high-pressure superheated steam.
Particulate control device (PCD). The warm syngas containing fine ash from the syngas cooler flows into the PCD, which is a barrier-filter system to remove particulates. The produced syngas is particulate-free, thus eliminating dirty-water or gray-water systems.
Sour shift. Part of the syngas from the PCD is sent to a saturation column, where the syngas is contacted with recycled condensate (water) to generate steam. This mixture of steam and syngas is sent to the sour-shift reactors. The fraction of total gas that is shifted is set by the desired H2:CO ratio at the inlet of the FT synthesis unit.
COS hydrolysis. The remaining (unshifted) syngas stream is sent through the catalytic carbonyl sulfide (COS) hydrolysis reactor to convert COS to hydrogen sulfide (H2S). The sour-shift reactor catalyst also promotes hydrolysis of COS to H2S from the syngas, which eliminates the need for a separate COS hydrolysis reactor for the portion of syngas that is being shifted.
Water recovery. Syngas streams leaving the sour-shift reactor and the COS reactor are individually cooled to condense water from the sour syngas. The water dissolves almost all of the nitrogenous compounds, chlorides and fluorides present along with lesser amounts of CO2, carbon monoxide (CO), H2S and COS. This aqueous mixture is removed from the syngas and recycled to the saturator system.
Mercury removal. The unshifted syngas stream from the COS reactor is cooled and combined with the shifted syngas and sent to the mercury removal unit. Elemental and any organic mercury present in the gas are adsorbed by the sulfur-impregnated activated carbon beds.
Acid-gas removal unit. Syngas leaving the mercury removal unit enters the acid-gas removal unit (AGRU). The AGR for the CTL plant is required for:
- Removing H2S and CO2 from the FT feed syngas from the gasifiers
- Removing CO2 from the reformed FT waste (offgas)
- Removing CO2 from reformed and shifted FT waste (offgas).
CO2 compressor. The combined acid-gas stream recovered from the AGRU at a low pressure and slightly above ambient temperature is routed through one or more CO2 compression trains to provide a dense-phase CO2 at about 155 bara. The compressed CO2 is expected to have a purity of > 96 mol% CO2 and about 0.5 mol% H2S.
FT synthesis and upgrading. Clean, sulfur-free syngas is sent to the FT reactors to produce hydrocarbon liquid products and reaction water. The light hydrocarbon liquids (condensate), along with liquid hydrocarbon wax removed from the FT reactor, are sent to the product-upgrading unit for further processing. The product-upgrading unit separately treats the hydrocarbon condensate and hydrocarbon waxy liquid. The hydrocarbon condensate is mildly hydrotreated to eliminate olefins and oxygenates. The waxy liquid is sent to an isomerization/dewaxing unit to convert the paraffins into premium-quality distillates. The FT process converts the clean syngas into finished products, including FT-based diesel, naphtha, kerosine and liquefied petroleum gas.
Offgas treatment. The offgas from FT synthesis containing valuable light hydrocarbons and unreacted H2 and CO is hydrotreated, shifted and sent to a steam-methane reformer to recover the syngas/hydrogen value. After CO2 removal, the reformed gas is sent to a pressure swing absorption (PSA) unit to recover pure H2, which is compressed and mixed with the treated synthesis gas entering the FT synthesis section providing the desired H2:CO ratio. This significantly reduces the amount of shifting required for the gasifier outlet gas. Waste gas from the PSA unit is fully utilized as fuel for the reformer furnace. The CO2 recovered in the reformed-gas AGRU is completely sulfur free. It can be compressed and exported for enhanced-oil recovery (EOR) and/or sequestration. This sulfur-free CO2 can also be sold as food grade or sent to urea plants after appropriate treatment steps.
CTL plant performance data
Table 2 summarizes the typical coal composition and high heating value for a low-ranked coal used in gasification. Table 3 lists production products and consumption for a typical 20,000-bpd CTL plant.
CTL plant financial data
These assumptions are made in the economic analysis of a CTL plant:
- Liquids production capacity = 20,000 bpd
- FT diesel = 14,000 bpd
- Naphtha = 5,300 bpd
- Compressed CO2 = 12,700 tpd
- Coal cost = $20/ton = $1.8/MMBtu
- Electricity cost = $100/MWh
- Oxygen cost is included in the CAPEX of ASU
- Operations and maintenance = 3.5% of CAPEX
- Administration = 0.5% of CAPEX
- Feedstock/product escalation = 5%/yr
- Capital structure: Debt-to-equity ratio = 60%:40%
- Cost of financing = 8%
- Corporate tax rate = 25%
- Plant availability = 330 days per year, 90%
- Internal rate of return (IRR) = 20%.
FT diesel and naphtha pricing. FT diesel has superior qualities with no/very-low-sulfur and low-aromatics content, high-cetane and good cold-flow characteristics; thus, its price is comparable to ultra-low-sulfur diesel (ULSD) prices.11 For this economic analysis, a 5% premium on present ULSD pricing is assumed to estimate the FT diesel price. The present selling prices of ULSD and naphtha in Singapore, Europe, US Gulf Coast and Mediterranean are listed in Table 4.11 Based on the ULSD density of 876 kg/m3 and naphtha density of 740 kg/m3, the selling prices of ULSD and naphtha in Europe are calculated.12,13 Adding a 5% premium to the ULSD prices yielded the FT diesel prices, as summarized in Table 4.
FT diesel cost of production. Table 5 lists the FT diesel production costs in Asia and the US. The assumed selling prices for compressed CO2 and the IRR are also listed in Table 5. The compressed CO2 at pressures of 155 bara are suitable for either EOR and/or storage. The plant-gate selling prices of compressed CO2 ranging between $25/ton to $35/ton are reported in literature.14
Best market for CTL is Asia-Pacific
Table 6 shows the profitability of CTL projects in Asia-Pacific and the US. The capital cost (CAPEX) for the CTL project in Asia-Pacific is only 70% of that for the US Gulf Coast. Thus, a CTL project can be extremely profitable in Asian markets such as India, China and Indonesia, where the cheap, low-rank coals are abundantly available and natural gas and crude oil reserves are scarce and/or priced at a premium.
The US market is less attractive than Asia, since the CAPEX for CTL is extremely high and abundant, lower-cost natural gas resources make the GTL process more suitable. At an IRR of 15%, the CTL is economically viable in the US.
The European market is also not very attractive for CTL due to high CAPEX. The Middle East/Arab Gulf market is also not attractive for CTL due to extremely abundant resources of crude oil, making refining the best option for liquids, and a significant amount of natural gas, making GTL the second best option.
Sensitivity analysis of CTL production in Asia-Pacific
Since the estimated cost of production of liquid fuels depends on assumptions, it is important to identify the sensitivities of these factors on the liquid-fuel production cost. Fig. 13 shows such a sensitivity analysis. The blue lines in Fig. 13 indicate the effect of an increase in each factor on FT diesel production cost, while yellow lines indicate the effect of a decrease in the factor.
As illustrated in Fig. 13, the FT diesel production cost is most sensitive to CAPEX. Increasing the CAPEX by 25% increases the FT diesel production cost by 31%, while decreasing the CAPEX by 25% decreases the FT diesel production cost by 31%. Typically, the CAPEX in India and China are 70% of the CAPEX on the US Gulf Coast. The cost of coal has the second highest impact on the FT diesel production cost. Increasing the coal cost to $30/ton ($2.7/MMBtu) increases the production cost by 13%, while decreasing the coal cost to $10/ton ($0.9/MMBtu) decreases the production cost by 13%. Oxygen is also a raw material in addition to coal; the oxygen cost is already included in the CAPEX as part of the ASU. It is not explicitly used as a variable for sensitivity analysis. Plant availability and corporate tax rates have the least impact on the production cost. Present inflation rates in the US, China and India are 3.6%, 5% and 9%, respectively.79 The inflation rates are varied in the economic analysis to cover various geographical regions.
Fig. 13. Sensitivity analysis of change in FT
diesel cost of production.
What price of crude oil makes CTL more attractive?
CTL is estimated to be economically more attractive than refining when the selling price for crude oil is between $55/bbl and $65/bbl (US 2007 dollars) using a WTI benchmark.15 These prices include the costs of capturing about 90% of CO2 emissions from the CTL plant, but do not assume any income or outlays associated with sequestering that CO2. The FT diesel can be produced at $1.7/gal to $2/gal (January 2007 dollars), directly comparable to refinery gate prices of ULSD, which is $2.41/gal.16 At world crude oil prices of between $60/bbl and $100/bbl (2007 dollars), direct economic profits are more likely.15 Lower world oil prices will likely be the result of any increase in liquid-fuel production, either domestically or abroad, from unconventional resources. Based on examining a broad range of potential responses by the Organization of the Petroleum Exporting Countries (OPEC), it is anticipated that world oil prices will drop by between 0.6% and 1.6% for each million barrels of unconventional fuel production that would not otherwise be on the market. Further, this price decrease should be close to linear for unconventional-fuel additions of up to 10 MMbpd. Looking only at coal-derived liquids, it is possible that total world production could reach about 6 MMbpd by 2030.15
Coal-gasification technology for liquid-fuel plants offers an economically attractive option for manufacturing liquid fuels, especially in Asian countries with large coal reserves and limited or high-cost crude oil and natural gas deposits, such as China, India and Indonesia. The prospect for developing an economically viable CTL in the US looks promising, although important uncertainties in future crude oil prices and the environmental policies on greenhouse-gas emissions exist. Coal gasification technology for liquid fuel plants will ease the pressures due to increasing global demand of liquid fuels and various derivatives. Coal-gasification technology will find increasingly greater use due to a wide range of coal feedstocks, particularly the low-rank coals, which are cheap and abundant. HP
1 USEIA, Annual Energy Outlook 2011, With Projections to 2035, April 2011.
2 IHS Cambridge Energy Research Associates (CERA), August 2011.
3 http://www.worldcoal.org/coal/where-is-coal-found/, World Coal Association.
4 Berg, D. R., B. Oakley, S. Parik and A. Paterson, The Business Case for Coal Gasification with Co-Production, Scully Capital, December 2007.
5 FT Solutions LLC, http://www.nma.org/pdf/liquid_coal_fuels_100505.pdf.
7 US Bureau of Labor Statistics, July 15, 2011.
8 CIA, The World Fact Book, August 2011.
9 Monthly Review of Indian Economy, Economic Affairs and Research Division, FICCI, April 2011.
10 USEIA, International Energy Outlook 2011, September 2011.
11 Purvin and Gertz Inc., Global Petroleum Market Outlook: Petroleum Balances, Vol. 1, March 2011.
14 DOE/NETL, Storing CO2 with Enhanced Oil Recovery, February 2008.
15 J. T. Bartis, F. Camm, D. S. Ortiz, Producing Liquid Fuels from Coal: Prospects and Policy Issues.
16 USEIA, Annual Energy Outlook 2008: With Projections to 2030, June 2008.
a CTL process uses KBRs proprietary Transport Reactor Integrated Gasifier (TRIG).
Dr. Bharthwaj Anantharaman is a principal process engineer in the ammonia and syngas technology at Kellogg, Brown and Root (KBR) in Houston, Texas. Dr. Anantharaman has authored papers in industry magazines, presented talks at industrial conferences and published a book entitled, Catalytic Partial Oxidation Reaction Mechanisms: Commercial Application to Industrial Ethylene Epoxidation. His work focuses on both the technical and financial aspects of chemical technologies with practical applications. Dr. Anantharaman holds a BTech degree in chemical engineering from Indian Institute of Technology, Madras, a PhD in chemical engineering from the Massachusetts Institute of Technology (MIT), and a certificate in financial technology from the Sloan School of Management of MIT.
Ron Gualy is vice president technology, coal monetization with KBR in the US. He is working in the technology business unit with responsibilities to manage and to grow the gasification business line. He is responsible for managing the execution of the projects, coordinating with sales, and defining a technology strategy that supports the present offering and technology improvements. Prior to this assignment, he was vice president technology acquisitions within the KBRs technology business unit. Mr. Gauly is a chemical engineer graduated from Texas A&M University with more than 28 years of experience in the industry and extensive worldwide business exposure. He has over sixteen years of experience in technology management and licensing activities, and growing and managing a business line. In his previous experience, he has participated in several new technology development and commercialization programs.
Debasree Chatterjee is working as process engineer in coal monetization team in KBR Technology, Delhi. She has worked in the field of coal gasification for more than five years with different technology licensors. She holds a MS degree in chemical Engineering from Indian Institute Of Technology, Kanpur and BS degree from Jadavpur University, Kolkata.
Siva Ariyapadi is technology manager, coal monetization, for KBR (Houston). In his current role, he supports KBRs coal gasification product line with worldwide technology licensing, business development and marketing efforts related to the Transport Gasification Technology (TRIG). He has 15 years of industry experience in the energy and chemicals business sectorincluding heavy-oil upgrading, LNG process technology, gas monetization, synthesis gas, coal gasification and carbon capture technologies. He holds a PhD degree in chemical engineering from the University of Western Ontario, Canada.