Datang Huayin Electric Power Co said yesterday it plans to build a coal-to-gas project in Inner Mongolia that would require total investment of 17.4 billion yuan (US$2.5 billion) and use American technology.
Datang Huayin, based in Changsha, Hunan Province, has signed a framework agreement with local governments in Erdos City and Yijinhuoluo Prefecture for the plant, using the "blue-gas" technology invented by US-based GreatPoint Energy, it said in a filing to the Shanghai Stock Exchange.
Three phases are planned for the project, with the first demonstration phase requiring 800 tons of coal input every day.
If stage is successful, larger capacities will follow on, along with some power generating units that will run on the gas, which is cleaner than coal-fired generation, said the company, without giving a clear schedule.
To ensure stable supply to the gasification plant and its own power stations in Hunan, Datang Huayin said it also has signed deal with governments in Erdos and Yijinhuoluo, which agreed to set aside coal fields with total reserves of no less than 1.5 billion tons for it to mine.
Chinese power firms, struggling with surging coal prices and state-set tariffs, are starting to seek their own fuel supplies to reduce coal costs. Datang Huayin is a unit of China Datang Corp, one of the five Chinese power majors.
Lower costs
The bluegas process uses a proprietary catalyst to lower the cost of standard gasification. By combining coal, steam, pressure and a catalyst in a standard reactor, bluegas eliminates the need for pure oxygen, raises the overall process efficiency, increases reliability and lowers capital and operating costs of the plant.
Its gas cost is expected to be under US$4 a million British thermal units, versus over US$4.20 for conventional drilled natural gas, according to GreatPoint's Website.
