Eastman Gasification Overview. March 22, 2005

Transcription

1 Eastman Gasification Overview March 22, 2005

2 hfounded in 1920 as part of Eastman Kodak - wood to methanol plant hspun off from Kodak - January 1, 1994 happroximately $6 B in annual sales hheadquarters - Kingsport, TN hmanufacturing sites around the world

3 Gasification 101 Just the Basics C + O 2 + H 2 O CO + H 2 Carbon + Oxygen + Water Carbon Monoxide + Hydrogen The partial oxidation of carbon to produce a "synthesis" gas Gasification is not combustion!

4 Gasification Basics Slurry Prep Coal/Petcoke Water Coal/Petcoke Slurry 55% - 70% Solids

5 Gasification Basics Air Separation Oxygen Oxygen feed to gasifier 95% to 99+% purity Cryogenic distillation -180 Deg C ASU Nitrogen Argon Air Compressor Co-production of N 2 and Ar for liquid sales, NO X control, general inerting

6 What is Gasification? Oxygen Controlled Chemical Reaction Up to 1,000 psig or more Nominal 2,600 Deg F Coal or Petcoke Water Products (syngas): CO (Carbon Monoxide) H 2 (Hydrogen) [CO/H 2 ratio can be adjusted] By-products: H 2 S (Hydrogen Sulfide) Gas Clean-Up Before Product Use! CO 2 (Carbon Dioxide) Slag (Minerals from coal)

7 What is Gasification? Oxygen Coal or Petcoke Water Controlled Chemical Reaction Up to 1,000 psig or more Nominal 2,600 Deg F Advantages of GE Gasification: Lowest capital cost and COE (Quench) Straight forward design (Quench) Products (syngas): Gas ready for shifting (Chemicals/H 2 /CO 2 Seq.) CO (Carbon Monoxide) High pressure operation (up to 1200 psig) H 2 (Hydrogen) High temp. gasification/vitrified slag [CO/H 2 ratio can be adjusted] More experience (60 installed sites) For higher efficiency, HP Steam By-products: Quench/Radiant or Radiant + Convective H 2 S (Hydrogen Sulfide) Gas Clean-Up Before Product Use! CO 2 (Carbon Dioxide) Slag (Minerals from coal)

8 Gasification Basics Gas Cooling Hot Syngas Steam Steam Turbine or process heating Cool Syngas BFW Water/Gas Separator Water, recycled

9 AGR Technologies Can Provide Near 100% Sulfur Removal If Required "Clean Syngas" CO, H 2 Clean Solvent (AGR = Acid Gas Removal) Three Main Technologies: MDEA (methyldiethanolamine) Chemical absorption, 98% to 99+% S removal, large CO 2 slip (unless use a second stage for CO 2 recovery), moderate operating temperature, lowest AGR capital cost Dirty Solvent "Dirty Syngas" CO,H 2,CO 2,H 2 S Selexol tm (primarily dimethyl ethers of polyethylene glycol, DEPE) Physical absorption, 99+% S removal, variable CO 2 slip (based on design), higher AGR cost than MDEA but overall AGR/SRU system costs are similar Rectisol tm (methanol) - Physical absorption, 99.5% to 99.9+% S removal, complete CO 2 removal possible, highest AGR cost, coldest operating temperatures

10 Air Air Separation Gasification Basics Oxygen N2 Steam Compressor Ar Cooling/Stm Gen Petcoke or Coal Water Slurry Prep CO H 2 H 2 S Clean, Dry Syngas Solvent/ Absorbent CO 2 Gasification Vitrified Slag Gas Clean-up

11 So what can you do with CO and H2? Syngas Building Blocks for Chemical Industry Transportation Fuels Clean Electricity

12 NGCC: Natural Gas Combined-Cycle Plant Natural Gas Air Combustion Turbine Steam CO 2 Most new power plants in the United States in the last 10 to 15 years have been natural gas based SteamTurbine Electricity

13 Integrated Gasification Combined-Cycle (IGCC): Replace NG Feed With Syngas Natural Gas X Air Combustion Turbine Steam CO 2 SteamTurbine Electricity Syngas from Coal/Petcoke Gasification (adjacent or via pipeline)

14 Integrated Gasification Combined-Cycle (IGCC) Air Separation Unit (ASU) Oxygen Gasification Block Air Slag Crude Syngas Volatile Mercury Pure Sulfur 90+% 98+% Removal Removal Gas Clean-Up Block Clean Syngas Eastman Coal Gas Facility Combined- Cycle Power Block Coal (or other Carbon Source) Water CO 2 Capture (ready for sequestration) Electricity Contaminants Removed Pre-Combustion!!!

15 What is IGCC? Air Separation Unit (ASU) CO2 Coal + Low Temp Gas Cooling Slurry O2 Flexibility for CO2 Sequestration (Concentrated Stream) Hg Removal 90+% Removal Shift Rx (option) CO/H2 H2O Acid Gas Removal Particulate Scrubber GE "Quench" Gasifier Sulfur Recovery Claus/Scot 98+% Removal Sulfur Steam Turbine Electricity Air Fines/Char HRSG PRE-COMBUSTION Treatment of Pollutants High pressure Low Volume Concentrated stream (easier to treat) Slag/Frit Combustion Turbine Compressed Air to ASU Electricity

16 Gasification-Based Polygeneration: Replace NG and/or Oil With Coal/Petcoke Natural Gas and/or Oil X Syngas from Coal/Petcoke Gasification (adjacent or via pipeline) Combined-Cycle Power Plant Chemical Facilities Electricity + Chemicals, Synfuels, Fertilizers, and/or Hydrogen

17 Air Separation Unit Gasification-Based Polygeneration (Ultimate Flexibility) CO2 Coal + Low Temp Gas Cooling Slurry O2 Mercury Removal Shift Reactor CO/H2 H2O Acid Gas Removal Particulate Scrubber Texaco "Quench" Gasifier Sulfur CO/H2 to chemical plant Tail Gas Recycle to C.T. Fines/Char CO2 Chemical Plant Steam Turbine Electricity Air HRSG Peak or backup fuel to C.T. Slag/Frit Sales Combustion Turbine Electricity

18 Polygeneration Potential of Gasification Naphtha Power & Steam Waxes Fischer- Tropsch Liquids Coal/Petcoke Gasification Synthesis Gas H 2 Iron Reduction Fuel/Town Gas Ammonia & Urea FT Diesel Car Fuel Methanol Dimethyl Ether VAM Acetic Acid Ketene Acetate Esters Methyl Acetate Ethylene & Propylene PVA Diketene & Derivatives Acetic Anhydride Oxo Chemicals Polyolefins

19 Benefits of Polygeneration Higher overall value creation Higher overall thermal efficiency and feedstock utilization Synergistic usage of low grade steam and waste streams Enhanced ability to load follow (intermediate vs. baseload operation) Higher employment for the community Enhanced reliability, with potential to store syngas as a liquid fuel

20 Trends Driving the Gasification Industry Steady Growing Demand for Electricity U.S. Energy Security/Diversity (Coal vs. NG) Growing Natural Gas (NG) Crisis Environmental Drivers (Cleanest Technology for Coal/Petcoke and Wastes) Growing Environmental and Financial Acceptance Flexibility to Face an Uncertain Future and to Open New Coal Markets

21 Growing Demand for Electricity Electric Power Demand - U.S. and China Steady demand growth of 1.5% to 2.0% still projected thru 2025 in U.S.; ~ 4.3% China demand growth. Demand (billion kwh's) U.S China Source: EIA International Energy Outlook 2003 Year Historical average reserve margin ~20% Source: NERC 2004 Long-Term Reliability Assessment

22 Why Coal? The U.S. has lots of it U.S. recoverable reserves of 268 Billion tons = 250+ years of supply We can distribute it Existing infrastructure in rail, barge, mine mouth It costs less and is less volatile in price $ /MMBtu vs. > $ /MMBtu for NG We re familiar with it 50% of current U.S. power is from coal It broadens our national fuel portfolio Insulates against price and availability shock of oil and natural gas IGCC Delivers Fuel Diversity and Energy Security Slide provided by ChevronTexaco

23 Power Generation in the U.S. Coal is still dominant! Source: DOE Energy Information Administration

24 U.S. Natural Gas Supply How Much is Left? U.S. Nat gas reserves: Proven: trillion cubic feet Unproven: trillion cubic feet Nat gas consumption: 27 trillion cubic feet/year (avg. over next 25 years) Years remaining at current usage: Proven reserves: 8.0 years Unproven reserves: 42.6 years Source: DOE Energy Information Administration 2005 Annual Energy Outlook

25 NG Prices for the Past Year Approximate Gasification Breakeven NG Price

26 7 Drivers of Natural Gas Crisis Return to more normal winters after unusually mild recent winters Steep drop in U.S. natural gas production since early 2001 Continuing rapid growth in use of NG to produce electricity Rapid growth in number of gas-heated homes Declining imports from Canada Increasing exports to Mexico Andrew D. Weissman, Energy Ventures Group

27 Vast New NG Construction Program More than 184 GW of gas-fired capacity brought into service since 2000 Enough new generation to serve more than ½ of Europe!!! Average capacity factor of NGCC plants in 2003 was 32%, leaving over 3.3 Tcf/yr of overhang capacity for NG demand William Rosenberg, National Gasification Strategy

28 More drilling, but less production; More reliance on imported LNG

29 U.S. Coal Supply How Much Coal is Left? Coal Reserves: Demonstrated Reserve Base: 508 billion tons Estimated % Recoverable: 54% Estimated recoverable: 268 billion tons 2003 Production: billion tons Source: DOE Energy Information Administration US Coal Reserves 1997 and 2003 Updates Years remaining at current levels: 250 years Other source: National Mining Association

30 Coal needs to return as a key feedstock and energy source in the U.S.!!! Gasification is the technology of choice for converting coal to clean and efficient power, chemicals, fertilizers, and fuels.

31 Why Gasification? It is the cleanest coal/petcoke technology Inherently lower SO X, NO X, and PM Lowest collateral solid wastes and wastewater Potential for lowest cost removal of mercury and CO 2 It is proven technology 21+ years of successful commercial operation at Eastman Multiple commercial IGCC s (e.g., TECO Polk, Wabash) It is becoming increasingly competitive Capital cost at parity with other clean coal and dropping Lowest dispatch cost of all fossil fuel technologies It is gaining acceptance Gaining support of environmental groups (e.g., NRDC, CATF) Numerous state and federal initiatives and incentives It provides great promise for the future Flexible feedstocks, process options, and products Opens new markets for coal (synfuels, chemicals, fertilizers) It provides the only feasible bridge from coal to hydrogen (directly converts coal/petcoke to hydrogen)

32 Why Gasification? Lowest Air Emissions (approaching NGCC) Power Plant Typical Emissions by Technology Type 0.5 lb/mmbtu IGCC Upside Potential: Mercury Removal CO Sequestration 2 (at fraction of cost for PC) NOx SO2 Particulates Traditional PC Retrofit Older PC's w/scrubbers & SCR (using low-s Coal) Advanced PC/SCPC/CFB IGCC w/mdea Absorber Type of Power Plant IGCC w/rectisol & SCR NGCC w/scr New NPRC/JGC IGCC is achieving < 2 ppm NO X and < 1 ppm SO 2!!! Basis: ChevronTexaco White Paper (3/03), DOE Report (5/99), and Recent EPA Permit Data

33 IGCC: Lowest Collateral Wastes CaCO 3 + SO 2 + ½O 2 => CaSO 4 +CO 2 [~ 2-4% add'l CO 2 ] 700 Lb/MW-hr (Dry Basis) Sludge ~ 5X Sulfur Byproducts Sludge Useful Sulfur Leachable Leachable Vitrified 0 Pulverized Coal Circulating Fluid Bed IGCC Slag/ Ash Sludge Sulfur CO2 No No Add l CO CO 2 Associated 2 with with Sulfur Removal for for IGCC Slide provided by G.E. Power Systems

34 ~ 30% - 40% Less Water Usage with IGCC DOE Report "Major Environmental Aspects of Gasification-Based Power Generation Technologies", December 2002

35 Vapor-Phase Mercury Removal Demonstrated for 21 years at Eastman!

36 IGCC: Low-Cost Option for Mercury Control An order of magnitude less expensive for IGCC (COE = Cost of Electricity) Technology Mercury (Hg) removal location Relative volumetric gas flow Cost of Hg removal, $/MWh Fraction of COE Cost of removal, $/pound Hg IGCC Syngas (ahead of AGR) 1.0 $0.254/MWh < 1% $3,412/pound PC Stack gas 160 $3.10/MWh ~ 9% $37,800/pound DOE Report, "The Cost of Mercury Removal in an IGCC Plant", September, 2002

37 IGCC: Low-Risk Option for Carbon Capture IGCC Minimizes Capital Cost Penalty of CO 2 Capture DOE Report "Major Environmental Aspects of Gasification-Based Power Generation Technologies", December 2002

38 Proven Technology First U.S. commercial coal gasification facility in 1983 at Eastman Chemical Company First IGCC plant demonstrated in 1984 at Cool Water site in California. 14 current IGCC plants globally, including TECO s Polk Plant and Global Energy s Wabash Plant. (~ 130 total global gasifiers) Eastman has achieved world-class success in coal gasification for over 21 years.

39 Economic Drivers for IGCC IGCC Economic Project Drivers 560 MW Plant Elec. Price (+/- 20%) Critical Drivers Capex (+/- 20%) Reliability (+/- 10%) Coal Price (+/- 20%) Heat Rate (+/- 20%) O & M (+/- 20%) NPV Change from Baseline, $M

40 IGCC Economics are Increasingly Competitive EPC Capital Costs Near Parity with PC Plants: Capital costs of pulverized coal plants have been increasing to ~ $ /KW as emissions requirements have tightened. Capital costs of IGCC have been falling (currently projected as ~ $ /KW) as multiple plants are built and improved, with considerable additional downward potential. Lowest Dispatch Costs: IGCC Dispatch Costs (fuel + variable O&M + environmental costs + consumables) are the lowest of all fossil fuel technologies.

41 IGCC Capital Cost Breakdown Combined Cycle Plant CT/HRSG/ST 43% AGR 7% Coal Prep 10% Gasifier Block 25% ASU 15% Potential to reduce total capital cost by re-fueling existing idle NGCC turbines

42 IGCC Capital Cost Improvement Recent Clean Coal PC Plants Target Range For IGCC x x Source: GE Power Systems, Power-Gen 2002 Presentation

43 Key Advantages of IGCC vs. PC Boilers Environmental: Inherently lower air, water, and solids emissions Pre-combustion treatment vs. post-combustion treatment enables easier and lower removal of pollutants Low-cost effective volatile mercury removal Much lower costs for CO 2 capture than with PC Efficiency: Combined cycle turbines or fuel cells vs. only steam turbines IGCC capital costs falling while efficiency increases; PC/SCPC capital costs increasing while efficiency falls Flexibility: Upgrade later at minimum cost for CO 2 sequestration, mercury removal, or to increase sulfur and NO x removal Ability to co-produce chemicals, fertilizers, fuels, or hydrogen Can handle variety of feedstocks including petcoke and biomass

44 Gasification Ready for Prime Time!! Competitive cost of electricity (superior dispatch cost - lowest for all fossil fuels) Exceptional environmental performance, including cost effective volatile mercury removal and potential for lowest-cost CO2 capture and sequestration Refueling of NGCC plants (replacing NG with coal) Production of hydrogen to fuel the coming economy (FutureGen Initiative) Promise of new markets for coal - potential for transformation of the chemical, fuels, and fertilizer industries Gasification is the future for coal!!!

45 Eastman s Experience with Gasification We were a pioneer in coal gasification First commercial U.S. coal gasification facility in 1983 Designated as ACS National Historic Chemical Landmark Industry leading operating performance > 98% on-stream time since 1984 < 1-2% forced outage rate Highest production rate per unit of capacity Single-train reliability of ~88-90% (~94% excl. refractory change) Excellent safety record Plantwide OSHA recordable rate of ~1.0 No lost time in gasification area in over 12 yrs Exceptional environmental performance Remove >99.9% of sulfur Patented sulfur-free start-up process Volatile mercury removal for over 21 years Continual process improvement Reduced maintenance costs 20-30% in past 6 years Patented feed injector designs for longer run life

46 ASU Air Products Steam Clean Syngas Syngas Conversion Air Compressor Hg Removal H 2 CO Coal N 2 /Ar Oxygen Shift Reactor Gas Clean-up (Rectisol) Acid Gases Water Grinding Rod Mill GE Gasifier (1 + Spare) Particulate Scrubber Sulfur Recovery CO/H 2 Separation (Cryogenic) Chemicals Acetic Anhydride Acetic Acid Methyl Acetate Methanol Flash drum CO 2 Lock Hopper Water recycle Sulfur Slurry Pump Solids Filtration Gasification at Eastman Basic Flow Diagram

47 Chemicals from Coal The Chemistry Syn Gas (CO + H2) Methanol Methyl Acetate Plant Methanol Plant Methyl Acetate Carbon Monoxide (CO) Carbonylation Plant Primary Reactions: CO + H 2 CH 3 OH (methanol) CH 3 OH + CO CH 3 COOH (acetic acid) CH 3 OH+ CH 3 COOH CH 3 CO 2 CH 3 (methyl acetate) CO + CH 3 CO 2 CH 3 (CH 3 CO) 2 O (acetic anhydride) Acetic Anhydride Acetic Acid

48 Eastman Chemicals from Coal The Big Picture It s likely you have used a product based on coal gasification from Eastman s facility! Coal Acetic Anhydride Acetic Acid Methanol Methyl Acetate Several major products are single-sourced from Eastman's coal gasification process!! Thus, reliability is critical!!!

49 Reliable Gasification Operation Yes, it can be done! The Devil is in the details.

50 On-Stream 98.0 % Eastman Operating Statistics Three-Year Cycle (09/01 09/04) including planned shutdown Unplanned 1.2% Not Needed 0.0% Planned 0.8% Industry-Leading Performance!!!

51 Eastman Operating Statistics One-Year Cycle (Sept Sept 2003) On-Stream 98.9 % Planned 0.0% Unplanned 1.1% Not Needed 0.0%

52 Sustained Low Forced Outage Rate 10 Eastman Gasification Plant Historical Forced Outage Rate Forced Outage Rate has Averaged < 2% since 1984!!! % Forced Outage Rate

53 Industry Leading Gasifier Productivity!!! Continual Process Improvement Historical Syngas Production Rate Annual loading factor = 127% Syngas Production BSCF Annual Capacity Loading Factor = annual production/(design at full rates x 365 days/yr)

54 Safety Plantwide OSHA recordable injury rate ~ 1.0 [Equates to one injury in over 15 years for a family of four!] [OSHA injuries = injuries that require more than minor 1 st aid] Last gasification area work day out case was over 12 years ago (sprained ankle stepping off a curb) Plant site received Tennessee OSHA Volunteer Star safety certification in 2001

55 Eastman Environmental Performance Cleanest U.S. coal gasification facility. Sulfur removal is > 99.9% (with Rectisol); <0.1 ppm sulfur in our syngas. Eastman has a patented sulfur-free start-up process (no SO 2 from flare). Eastman has practiced essentially complete vapor-phase mercury removal from syngas since our initial plant start-up. Excellent environmental record and reputation.

56 Market Needs/Concerns for Gasification High Capital Costs: need capital costs similar to other coal-based technologies Unfamiliarity to Utilities: gasifiers are more like chemical processes than boilers Time to Capacity: previous IGCC plants have taken too long (several years) to get to full design capacity Reliability Concerns: need acceptable reliabilities and availabilities for facilities (90+%) Financing of Projects: bankers need guarantees or assurances that gasifiers will perform well Economic and Environmental Uncertainties: uncertainties regarding economic recovery, Enron fall-out, natural gas price forecasts, energy bill tax incentives, and multi-pollutant legislation

57 Eastman s Value Proposition Market Need High Capital Costs Unfamiliarity to Utilities Time to Capacity Reliability Concerns Financing of Projects Economic & Environmental Uncertainties Eastman Value Creation Eastman helps owners make intelligent design choices Eastman knows gasification (21 yrs experience); O&M services Eastman's 21-yrs experience can enable faster start-ups Eastman has the best operating performance in the industry; offering O&M services Eastman can help offer adequate warranties Eastman works with industry and government to understand & plan for uncertainties

58 How Important is Reliability IGCC Economic Project Drivers 560 MW Plant Elec. Price (+/- 20%) Capex (+/- 20%) Reliability (+/- 10%) Coal Price (+/- 20%) Heat Rate (+/- 20%) O & M (+/- 20%) NPV Change from Baseline, $M

59 Eastman will help gasifier owners get more out of their plants, including faster start-ups and improved long-term availability and reliability World-class operational performance Intelligent design choices to limit capital costs Patented technology improvements Exceptional safety and environmental records Best partner for polygeneration options

60 Eastman s Value to Gasifier Owners Gasification Plant Start-up Schedule $$$ Capacity Factor (% of Design) $$$ = --- Eastman Potential --- Min. Required for Project --- Industry Past History Time from Mechanical Completion

61 Building on Past Success Eastman Gasification Services Company Service Offerings: h h h h h h A subsidiary of Eastman Chemical Company Operations, maintenance, and management contracts Technical services Critical spare parts fabrication Specific technology licensing Cooperative services agreement with ChevronTexaco/GE Project development

62 Don't leave your success to chance! Use Eastman Gasification Services!

63 Together we can realize the full potential of gasification!

64 QUESTIONS?