Georgia-Pacific Sees Petroleum Coke as Potential Fuel of the Future

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Over the last three years, high-energy cost weighed heavily on the forest products industry. The impact on operating cost, particularly related to natural gas, cut deeply into profit margins and forced some mills to take downtime, and others to shut down permanently. As forest products companies continue to face contracting market conditions, cost concerns will play a larger role in the viability of mills, therefore increasing pressure to conserve energy, improve energy efficiencies, and find alternate sources of fuel. To that measure, Georgia-Pacific (NYSE:GP) (Atlanta, Georgia) is taking initiatives towards insulating its assets from high natural gas prices by increasing the use of petroleum coke at two of its largest natural gas consuming mills.

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Petroleum coke, often referred to as petcoke, is a byproduct of crude oil refining and is widely used as a fuel in power and cement plants. In pulp and paper mills, petcoke has been mostly limited to co-firing lime recovery kilns and as a dual-fuel in combination boilers. However, advancements in oil refining technology and circulating fluidized bed (CFB) technology have led to increased production of petcoke, and allow for pet coke to be utilized 100% as a primary fuel for power generation. Thus, allowing for high sulfur content petroleum coke as a viable and competitive alternative to coal and natural gas.

Georgia-Pacific's pulp and paper mill located in Zachary, Louisiana, is the company's largest consumer of natural gas, estimated to be upwards of 20MM cubic feet per day. The company is seeking permits for a new boiler that will use 100% petcoke as a primary fuel. The $120 million project includes the new boiler, and increasing the mill’s 55MW power plant by an additional 50-60MW.

At the company's kraft linerboard mill in Monticello, Mississippi, a $40 million project for the installation of a new fluidized-bed boiler, is in the developmental stage. The new petcoke boiler will significantly cut into the mill's demand for 14MM cubic feet per day of gas and contribute to reducing the operating cost of the mills 70MW power plant.

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