Coal-gasification projects slow amid recession - consultant

18 September 2009 15:51  [Source: ICIS news]

By Tom Stundza, Purchasing magazine

BOSTON (ICIS news)--The high costs of coal-gasification projects have led to project delays as the nation also grapples with the economic recession, a consultant said on Friday.

“Coal to chemicals has gone from a red-hot to slightly cool topic within the chemicals industry,” said Michael Kratochwill, vice president of finance and strategy within Nexant’s energy and chemicals consulting division.

The delays include Eastman Chemical’s planned coal-gas project in Beaumont, Texas, which it announced this week was unlikely to come online until at least 2014. Previous reports had production beginning as early as 2011.

However, coal-gasification efforts will rebound as the nation exits the recession, Kratochwill told the Chemical Purchasing Summit organised in Boston by ICIS and Purchasing magazine.

Reasons for the anticipated recovery include abundant coal supply, market prices expected to rise only slowly, and the need for moderately-priced chemicals, he said.

Sixty percent of the world’s coal reserves are located in North America and Europe, he said, making supply more easily acquired for those producers.

Already used frequently to make methanol, methyl acetate and acetate anhydride, Kratochwill forecast increased use of coal through gasification to make olefins, dimethyl ether (DME), ammonia, urea, ammonium nitrade, hydrogen, acetic acid, acetic anhydride, formaldehyde, and the propionic, metracrylic and acrylic acids.

In addition, because production through coal gasification is not as well known as more conventional petrochemical methods, the process offers opportunities for improvements in technology and capital construction costs, he added.

For example, coal-gasification should produce cheaper synthetic gas in coming years, he said.

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