Monday, August 29, 2011

Gasification & IGCC in the news:

Texas Clean Energy
IGCC Still on Track

Summit close to PRB coal
deal for Texas IGCC plant

Summit Power Group, developer of the Texas Clean Energy Project,  is "probably within a month" of closing on Powder River Basin coal supplies for its $2.7 billion Texas Clean Energy Project near Odessa.  So said a company official Wednesday, Aug. 24, at the American Coal Council's Coal Market Strategies conference in Colorado Springs, Colorado.

The TCEP involves a 400-MW integrated gasification combined cycle (IGCC) power plant -- scheduled to start construction next year and enter service in 2015.  It will use 2  million ton/year of PRB coal, says Barry Cunningham, Summit managing director of project development.

Summit is talking with three PRB producers for supplies and is finalizing a contract with one of them, Cunningham said, declining to disclose names.

The business plan for the "polygen" project relies heavily on revenue from the production of byproducts, what Cunningham termed a "diversified revenue stream."

Revenue will come from 2.7 million ton/year of compressed CO2 to be sold for oil production at nearby wells, he said. The plant will capture 90% of its CO2, making it one of the world's highest CO2-capturing plant projects, Cunningham said.

One ton of CO2 yields 2.5 to 3 barrels of additional oil production, he said.

But urea production for agricultural fertilizer is expected to be the biggest component of the plant's revenue stream at 46%, he said.

All told, the plant will yield 190 MW net for power sales to the grid, Cunningham said, elaborating on the high cost of using self-generated power for the plant's CO2-capture system. This process "cannibalizes about 50% of the electricity" production, one conference participant remarked.

 Last month, Gas Turbine World reported that someone close to the project commented that the key issue for TCEP is to keep capital costs in check as it approaches the banking community for project finance.   This positive news about a pending coal supply contract should also help move it in the right direction.