Poland’s Azoty coal gasification plant financing on track

Interview article by Jonathan Lopez

LONDON (ICIS)–Grupa Azoty’s plans to build a coal gasification plant have received positive results from a final feasibility study, the Polish fertilizers and chemical company’s vice president said on Wednesday.

Meanwhile, discussions with European banks to get the €500m of investment required continue, Krzysztof Jalosinski added.

Azoty announced on 14 October plans to build a plant in south Poland to process local black coal into syngas and ammonia for industrial purposes.

Jalosinski, and Azoty’s carbochemistry director, Maria Skorupka, said by the end of November or beginning of December further announcements will be published about the final feasibility study. 

“We have had several meetings [with banks]. In the next meeting [to happen shortly] we will show them our data from the feasibility study and internal calculations which will show that this project is a low-emissions [of CO2] one, and will be done according to EU rules,” said Skorupka.

She added potential loan financing through the Polish Investments for Development agency is also being explored, adding the state-funded bank would issue loans with interest rates at market rates, stressing it is not state-funding but commercial loans which will need to be repaid.

The final feasibility study was carried out by UK’s engineering and services company AMEC Foster Wheeler, said Skorupka.

The coal gasification plant will not include carbon capture and storage (CCS) technologies, as confirmed by management.

An expert in petrochemicals from the International Energy Agency (IEA) said on 12 November CCS technologies are key to reduce CO2 emissions if countries like China or Poland itself wish to continue using coal as a source of energy.

Azoty said, however, although the plant will not include CCS technologies it will be “CCS-ready” and will be able to use compressed CO2 in other industrial applications.

“CCS-ready means we will have pure steam coming from CO2 which can be compressed and sent to another application. In our case, our plant’s CO2 will be used for production of food, products like soft drinks or mineral water, for example,” said Skorupka.

With the Polish state still owning a 33% stake at Grupa Azoty, the government in the country has been keen to develop projects using coal as it suffers from chronic oversupply. Poland produces approximately 70m tonnes/year of black coal, according to Azoty.

Although the planned coal gasification plant will only use between 1m and 2m tonnes of coal, Azoty sees this as a “starting point” in order to develop cleaner coal industrial projects which would potentially help overcome the coal oversupply.

“This will be the first project of this kind in Europe. We will design and construct the project according to EU rules, with low CO2 emission into the air. We want to show there can be good economic value in a coal project like this,” concluded Skorupka.