China Datang trial runs first coal-based natural gas project

02 August 2012 10:23  [Source: ICIS news]

SINGAPORE (ICIS)--China Datang Corp has started conducting trial runs at its new 1.33bn cubic metre (cbm)/year coal-to-gas project at Chifeng in Inner Mongolia from 28 July, a company source said on Thursday.

This is China’s first coal-based gas project, whose designed capacity will be expanded to 4bn cbm/year with two more phases, the Datang source said.

Feedstock coal will be supplied by Shengli Coalfield at Xilinhot in Inner Mongolia and water will be delivered from the Dashimen hydro-power station nearby.

The company was trying to distribute the gas through PetroChina’s Beijing-Shaanxi pipeline, but negotiations on prices were still not final, the source said.

“As we have not reached any agreement on the prices we had to abandon the current output [gas released into the air] and may consider turning it to liquefied natural gas (LNG) for sale,” the source added in Mandarin.

Most coal-based gas producers in China are eying to sell their outputs through pipelines operated by PetroChina and Sinopec as utilities.

Comparing with conventional natural gas, the unconventional coal-based gas has higher production cost.

However, buyers do not want to pay higher price which makes it difficult for the producers to sell their gas outputs, industry sources said.

By: Jane Han

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