Syntroleum Joins Australian Linc Energy’s Chinchilla Underground Coal Gasification Integrated Clean Power Project

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). A project which combines underground coal gasification (UCG) with gas-to-liquid (GTL) technology, and on site generation of commercial quantities of electricity will reach its initial commercial phase in 2006 at Chinchilla, Australia, 350 kilometers west of Brisbane. A 30-to 40-megawatt power generation plant will supply electricity to local markets.

The leader of the Chinchilla project, Linc Energy (Brisbane, Australia), has been applying the Exergy UCG technology, under license from Ergo Exergy Technologies (Cote Saint Luc, Quebec), to exploit what might have been classed as a ‘stranded’ coal deposit by injecting a mixture of air and steam into underground boreholes and igniting the coal in situ. The coal steam is gasified and hot product gas containing the key feedstock for power generation, Fischer-Tropsch (FT) synthesis (hydrogen and carbon monoxide, synthesis gas/syngas), is produced via a second series of boreholes.

This month (August) Syntroleum Corp (NASDAQ:SYNM ) (Tulsa, Oklahoma) has signed a Memorandum of Understanding (MoA) with Linc Energy to co-operate in the development of the coal to liquid (CTL) project using their Syntroleum ® process.

The agreement integrates Syntroleum’s own unique air-based FT technology with the Linc’s underground UCG operation. The MoA sets the terms for future UCG-CTL projects to be pursued by Linc under a CTL license from Syntroleum with options for the Tulsa company to take equity. The two companies will jointly fund a series of technology demonstration programs in advance of developing engineering designs for the CTL projects.

Linc has tenement rights to 13 coal reserves totaling 4 billion tons in Queensland and at Chinchilla there are 240 to 300 million tons available which, at a feed rate to the project of 4.4 million tpa, would keep the project in production for fifty years. The company intends to develop multiple worldwide CTL projects utilizing its proven UCG technology and expertise integrated with the Syntroleum (R) process. The second commercial phase of the project will see the Syntroleum based CTL plant producing 17.0000 bpd of synfuel and will include the expansion of the power plant.

The managing director of Linc Energy said that the advancements that Syntroleum have made at their Port of Catoosa Demonstration (Oklahoma) facility complemented the accomplishments by Linc at Chinchilla and set the stage for the successful integration of the two technologies. "Demonstration of this concept will provide a roadmap for converting Australia vast coal reserves into ultra-clean fuels," he said. Linc have had support from the Federal government in R&D financing.

In March, Syntroleum commemorated the successful production of more than 637,000 liters of ultra-clean fuels at its Catoosa GTL plant. It also manufactured 273,000 liters of additional products such as syncrude.

Some of the commercial advantages of the technologies linked project are that the on site characteristics of operations are low cost as the coal does not need to be mined or lifted, the gas produced is a straight feed into GTL process and as a feedstock the CTL gas is cheaper than natural gas. The product is also 100% biodegradable and sulfur free. The ability to exploit ‘stranded’ deposits also means that the potential basic resource deposits are vast and virtually limitless.

Ken Roberts, senior vice-president of business development at Syntroleum said, "Linc have produced commercial volumes of nitrogen-diluted syngas which we believe have the characteristics uniquely suitable for Syntroleum’s air-based FT process."

Some of the underground advantages of operating are: no external water supply is needed; the UCG process creates an immense underground gas and heat storage capacity, which makes the gas supply very stable and robust; outputs from various reactors can be varied to optimize coal extraction and gas supply from the whole gasifier; no ash or slag removal or handling are necessary since they predominantly stay behind in the underground cavities; ground water influx into the gasifier creates an effective ‘steam jacket’ around the reactor making the heat loss in situ tolerably small; optimal pressure in the underground gasifier promotes ground water flow into the activity, thus confining the chemical process to the limits of the gasifier and preventing contamination in the area.

In studies completed in 2002, Alstom and GE turbine specifications were used for efficiency and commercial viability models. The steady operational requirements of the gasification result in syngas power plants performing best in base load power applications. Syngas turbines require natural gas or distillate as a start up fuel and mist be dual fuel capable. Syngas power plants can switch to the backup fuel when syngas is unavailable or co-fire when syngas is limited. This increases the plants power availability to levels equivalent to natural gas fuelled power plants. The gas turbine’s output power is flat rated up to very high temperatures. (The two paragraphs above are based on material from the 2002 Gasification Technologies Conference, San Francisco).

A similar UCG process has been used in Russian and Eastern European projects for the past 30 years, but current energy security and environmental priorities make Chinchilla, and its leading-edge technology base, the right project at the right time. With none of the CO2 sequestration concerns of other energy resource models, the coal-derived syngas is burned in the turbines or used as feedstock in FT reactors and refining processes to make ultra clean diesel fuel.

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