China planning 200 bcm of coal-SNG projects
[2013-12-9]
China has some 200 billion cubic metres of synthetic natural gas (SNG) projects
in the pipeline, a senior engineer from China National Petroleum Corp. (CNPC)
said on Thursday in Beijing.
Projects to convert coal mined in remote parts of the country to SNG are being
planned in areas including the coal-rich autonomous regions of Xinjiang and
Inner Mongolia, and the provinces of Shanxi and Gansu, according to Pu Ming, a
senior engineer with CNPC’s China Petroleum and Petrochemical Engineering
Institute.
China’s push to build a coal-based SNG industry from scratch is part of the
central government’s plans to clean up air pollution by burning less coal and
more gas. Beijing has set ambitious targets for the industry to produce 15-18
bcm/y of SNG by 2015, an increase from almost none at present.
But the environmental impact of converting coal into SNG has sparked concern
among experts, who believe the drive risks accelerating climate change.
Environmental toll
“SNG has a heavy carbon and environmental footprint – the lifecycle greenhouse
gas emissions are roughly seven times that of conventional natural gas,”
researchers from Duke University in the United States said in a study published
in the journal Nature Climate Change.
China has more than 40 proposed SNG projects, which would produce 110 billion
tons of carbon dioxide over 40 years if built, said the study’s authors Chi-Jen
Yang and Robert Jackson.
By way of comparison, China produced 121 billion tons of CO2 emissions between
1971 and 2011, according to data from the International Energy Agency.
“At a minimum, Chinese policymakers should delay implementing their SNG plan to
avoid a potentially costly and environmentally damaging outcome,” said Yang. “An
even better decision would be to cancel the programme entirely.”
Producing SNG from coal is also highly water-intensive. The process needs 6-10
litres of fresh water to produce 1 cubic metre of SNG, compared with 0.1-0.2
litres for 1/cm of shale gas, according to the World Resources Institute.
So far, four projects with combined capacity of 15.1 bcm/y have been endorsed by
the government, Pu told delegates at the China Coal to SNG Market & Technology
Summit. Another 10 projects, with total capacity of 62 bcm, have received
approval to start pre-phase work, while the remainder are still in the planning
stages.
The majority of the projects are located in Xinjiang and Inner Mongolia, which
together account for 80% of the total annual production capacity, said Pu.
Chinese companies are building pipeline infrastructure to serve SNG projects
located far from demand centres on the eastern seaboard, with three operational,
according to Pu.
CNPC commissioned the country’s first SNG pipeline in July, in Xinjiang, at a
cost of RMB 996 million ($162 million). The 30 bcm/y pipeline runs for 70 km
between the cities of Yining and Khorgas, and will ultimately connect SNG plants
in Yining to the third West-East Pipeline (WEP III), which is under construction
by CNPC.
Private coal miner China Kingho Energy Group operates a 5.5 bcm/y project in
Yining that started feeding synthetic gas to the pipeline in August. It was then
discovered that the methane content of the gas did not meet national standards,
which prompted Kingho to suspend supplies to the pipeline while it tests and
improves output from its project, said Pu.
CNPC and China Datang Group, one of the country’s largest state-owned power
producers, have also collaborated on a pipeline that will send SNG from Keqi in
Inner Mongolia to Beijing. Datang built and runs the first section, spanning 360
km from Keqi to northeast Beijing, while CNPC built a 130 km segment within
Beijing, said Pu.
The pipeline will be fed by Datang’s 4 bcm/y facility in Keqi and is expected to
be put into operation by the end of the year.
Datang also completed construction of another pipeline in October that runs 110
km in Liaoning province. It can transport 12 million cubic metres per day.
China’s SNG producers have different options for selling their output.
Kingho decided to sell its gas to CNPC directly rather than pay the state oil
giant a transmission fee to use its pipelines, while Datang will pay to use
CNPC’s infrastructure and market the gas to buyers directly, Pu told Interfax on
the sidelines of the summit.
Pu added Datang and CNPC are still negotiating the transit fee.