Construction of $8.9 Billion of North American Coal Gasification Projects Planned for 2009

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Researched by Industrial Info Resources (Sugar Land, Texas)--As demand for electricity continues to grow in the face of increasingly stringent environmental regulations, coal gasification presents a viable option of producing cleaner energy from a traditionally "dirty" fuel. While gasification technology has existed for decades, the process is becoming increasingly prevalent in North America, with over $8.9 billion of coal gasification projects scheduled to begin construction in 2009. Industrial Info, as part of its North American Industrial Database, is currently tracking seven coal gasification projects set to kick off construction in 2009, with an average total investment value of $1.27 billion.

While six of the seven projects are grassroot projects, Eastman Chemical Company (NYSE:EMN) (Kingsport, Tennessee) is adding a $1.6 billion coal gasification facility to its existing Beaumont Methanol Plant (Beaumont, Texas). Fluor Daniel Incorporated (Greenville, South Carolina), the engineering and construction division of Fluor Corporation (NYSE:FLR) (Irving, Texas), has been selected as engineer for the project. The coal gasification facilities will be used to produce hydrocarbon fuels, methanol, hydrogen, ammonia and intermediates. Construction of the plant is planned to kick off in May 2009 and finish by the end of 2010.

Installation of the plant is already having a knock-on effect in other areas. Air Products and Chemicals Incorporated (NYSE:APD) (Allentown, Pennsylvania) is adding two 3,500-ton-per-day air separation units to its adjacent air separation facility to support Eastman's new facility. Construction of the $1.4 million air separation project is also planned to begin in May 2009.

Most of the coal gasification facilities scheduled for construction next year will produce synthetic natural gas, which can be used as a fuel similar to actual natural gas or an intermediate to create other substances. Waste Management & Processors Incorporated's (Frackville, Pennsylvania) $612 million plant in Frackville will use gasification as an intermediate step solely for the production of diesel. The plant will use a combination of Shell Global Solutions (NYSE:RDS.A) and Sasol (NYSE:SSL) (Johannesburg) technologies to gasify 700,000 tons per year of anthracite coal in order to create 5,000 barrels per day of diesel.

The coal gasification industry seems to be growing rapidly. Industrial Info is currently tracking over $17 billion of North American projects involving coal gasification that are planning to kick off construction after 2009. This year, construction on about $2.1 billion dollars of coal gasification or liquefaction projects is planned or has already started.

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