Synthesis Energy Systems Plans Coal-to-Methanol Project in China

A Houston-based energy and technology company has signed a project development agreement with a multinational chemical company to conduct feasibility studies and draft plans for a coal-to-methanol gasification plant in China.

Synthesis Energy Systems, the Houston firm, announced on Nov. 26 that the plant would support the unnamed chemical company's facilities in China and address the region's increased demand for clean petrochemical feedstocks.

"SES is proud to add this large industrial multinational player to its strategic partners, which includes the Gas Technology Institute, CONSOL Energy and AEI. These companies are committed to sustainable clean energy solutions through the use of low-cost and environmentally responsible modern U-GAS(r) coal gasification technology," said SES president and CEO Tim Vail.

The plant will use SES' exclusive U-GAS(r) technology to convert China's coal reserves into a synthesis gas ("syngas"), composed primarily of carbon monoxide and hydrogen. The syngas can be used as a basic building block in the petrochemical and refining industries. The syngas would then be refined into methanol, an organic raw commodity widely used in manufacturing chemical products including plastics, paints, and construction materials. The capacity of this plant would be similar in size to SES' two other coal-to-chemical projects currently under way in China.

"The global methanol market is expanding, especially in China where the demand for methanol as a transportation fuel has grown at a particularly fast pace during the past decade," said Vail.

According to a China Methanol Industry Forecast by C&G Consulting, China's methanol market reached approximately 8.2 million metric tons in 2006.

"Both production and demand for methanol are expected to continue to grow. We believe this proposed project, along with our three other active coal-to-chemical projects in China, should play an important role in strengthening China's energy security while minimizing the impact on the environment," Vail added.

U-GAS(r) technology produces much lower levels of regulated emissions, including sulfur oxides, nitrous oxides and particulates than conventional coal combustion plants. It also allows for the low-cost capture of greenhouse gases such as carbon dioxide.

Under the agreement, SES will conduct feasibility studies to identify the optimum site for the construction of the proposed plant in order to ensure adequate coal supply, coal and methanol transport costs and the permitting process. Subject to a successful plant-site designation, SES will conduct additional scoping work that will include further definition of project design, schedules and costs. At that point, further negotiation of a definitive agreement by both parties would be undertaken before initiating the project.

SES' U-GAS(r) technology, which its licenses from the Gas Technology Institute, is designed to turn high-ash coals and waste coal products into high-value synthesis gas for use in chemical applications or as a feedstock for producing transportation fuels.

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