New Zealand's Ravensdown Fertilizer and Solid Energy to Explore Lignite-to-Fertilizer/Fuel Technologies

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Ravensdown Fertilizer Cooperative Limited (Christchurch, New Zealand) and Solid Energy New Zealand Limited (Christchurch) have initiated a study to determine the feasibility of producing fertilizers from the vast lignite reserves of New Zealand. The investigation will focus primarily on the financial viability of setting up a $1 billion lignite-to-urea (LTU) plant, which will exploit mineral resources in the Eastern Southland region of the country. The firms also are expected to finalize the location of the plant at the end of the feasibility study. Upon completion, the project is expected to be a turning point in the fertilizer sector of New Zealand, making the country self-sufficient and a potential exporter of urea.

Depending on the findings of the ongoing preliminary study, which is due to be completed by early 2010, a detailed study is likely to be initiated. Subsequently, the project is expected to progress to the front-end engineering and design (FEED) stage. Subject to obtaining necessary funding as well as permits, construction is likely to commence by 2012, and plant operations are expected to start by the end of 2014.

The proposed LTU plant will have the capacity to process about 2 million tons per year of lignite to produce 1.2 million tons per year of urea, with fuel feedstock being procured from the lignite mines owned by Solid Energy. The LTU plant is expected to comply with carbon dioxide emission standards, with Solid Energy exploring options such as bio-feedstock, bio-sequestration, and carbon capture and storage techniques to reduce emissions from the venture.

The two firms also are simultaneously working on lignite-to-liquid (LTL) technologies aimed at producing diesel from lignite. It is envisaged that the LTU and LTL facilities will complement each other in the development of a synthetic gas park, which is expected to serve as a source of synthetic gas for downstream processes.

Urea, which is basically a nitrogen-rich fertilizer, is used to boost crop growth. Conventional urea production relies on a feedstock of coal or natural gas, gasification of which yields synthetic gas, a mixture of carbon monoxide and hydrogen. Hydrogen from the process is used in the production of ammonia, while synthetic gas itself can be further converted to liquid hydrocarbons such as gasoline and diesel, using the catalytic Fischer-Tropsch process. The fertilizer can be produced by further treating ammonia with carbon dioxide under controlled pressure and dehydrating the resulting ammonium carbamate. Coal-to-liquid processes can be established either directly by using liquefaction techniques such as hydrogenization or carbonization, or the aforementioned Fischer-Tropsch process. Liquefaction, however, results in carbon dioxide emissions.

Coal-based urea production is prevalent in China, while the Taranaki region in New Zealand produces urea from natural gas. If the LTU technology were to be successfully employed in commercial operations, New Zealand, which presently imports 500,000 tons per year of urea, will be able to export 750,000 tons per year of urea in addition to meeting its internal requirements. Based on the current price of urea in the global market, the export value is estimated to be nearly $1.5 billion. The new plant also will enjoy a carbon subsidy of $500 million during its initial 20-year operations period, with subsidies likely to be passed on to the farmers who use the product, despite the fact that the use of urea would eventually release nitrous oxide into the atmosphere in the long run.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.