2014 Gasification Technologies Conference Washington, DC Oct UOP LLC. All rights reserved.

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1 Techno-economic economic analysis of acid gas removal solutions for SNG applications Ganesh Nayak 2014 Gasification Technologies Conference Washington, DC Oct UOP LLC. All rights reserved.

2 Criteria for successful SNG plant in China Drivers Economics Technology 2 UOP

3 UOP Company Profile Serving the Gas Processing, Refining & Petrochemical Industries Profile Significant Technology Position Sales: Breakdown Business Units: Gas Processing and Hydrogen (GP&H) Process Technology & Equipment (PT&E) Catalysts, Adsorbents & Specialties (CA&S) Renewable Energy and Chemicals (RE&C) Offering: Technology, catalyst & services to the refining, petrochemical and gas processing industries Supplier of molecular sieve adsorbents to process and manufacturing industries Equipment Products Services Licensing Equipment 45% Products 35% Licensing 7% Services 13% UOP Facilities Global Footprint Sales: Geographic Worldwide Headquarters Des Plaines, Illinois (suburban Chicago) 3,500+ Employees 20 Offices 17 Countries 12 Manufacturing Facilities 5 Engineering Centers UOP Offices UOP Manufacturing Sites Global Customers Asia Pacific 19% North America 32% China 12% India 5% Middle East 9% South America 9% E&A 9% CIS 5% 3 UOP

4 Natural Gas Dynamics in China 1. Supply - Demand gap Growth rate expected to be over 15% over next 5 years Limited domestic production, unable to meet rising demand Increasing reliance on imported gas through WE pipelines and LNG imports NDRC implementation of NG utilization policy Usage and production of natural gas 2. Substitute Natural Gas potential to reduce supply-demand gap NDRC State Mandate increase NG supply to reach 400bcm by 2020 Promote SNG projects in coal rich regions and supply SNG to Beijing-Tianjin-Hebei to reduce particulate emissions SNG capacity to reach 9bcm by 2015 and 32bcm by 2017 Translates to over 20 large scale projects over next 5 years Major promoters include SOEs and NOCs 3. Techno-economic solution key to successful investment in project NDRC State Mandate SNG plants to be built under strict environmental regulation compliances Address water supply security to SNG projects Monetize low rank coal maximize NG coal price spread Source: Notification on Several Issues for Establishment of Long Term Mechanism for Stable Natural Gas Supply Security 2014 NDRC Notification on Issuance of Energy Industry Enhancement of Airborne Pollution Prevention & Treatment Program 2014 NDRC Asiachem SNG growth to come from robust techno-economic solution and State Mandates 4 UOP

5 Gasification Economics & Efficiencies SNG case Gasification/ ASU Shift/Cooling AGRU Methanation Coal SNG Gasification + ASU WGS AGRU Methanation Efficiency Losses -25% -3% -11% 61% CAPEX Breakdown 62% 22% 16% Source: University of Kentucky Study on SNG and CTL, 2007 China SNG demo project information Lower CAPEX critical factor in technology selection 5 UOP

6 Case Study for Economic Analysis of SNG plant 1. Basis Coal Price: $2.00/mmbtu (HHV = 10,000 Btu/lb $45/ton) SNG Plant size: 2billion Nm3/yr 214,000mmbtu/day SNG Plant CAPEX: $2.1billion $9,800/mmbtu SNG Plant OPEX: $113million/y $1.60/mmbtu 2. Configurations ASU CO 2 O 2 Coal Gasification Syngas CO Shift UOP SeparALL Process Clean Syngas Methanation SNG H 2 S Source: China demo SNG project information Asiachem University of Kentucky Study on SNG and CTL, UOP

7 Natural Gas Economics in China NG cost in China, $/Nm 3 IRR (Weighted Average Cost of Capital) 4% 6% 8% 10% 12% Feedstock Price, $/mmbtu Capex, $/mmbtu (per day basis) Opex, $/mmbtu 11, , LNG imports SNG Domestic NG SNG Plant Efficiency (%) Interpretation SNG could have potential to displace expensive LNG imports IRR is highly sensitive to feedstock price followed by CAPEX of SNG plant SNG project becomes feasible when: project is at coal mine mouth variability around CAPEX is lower Impact of OPEX on SNG economics is not as significant as CAPEX 7 UOP

8 What is the UOP SeparALL Process? Next generation solution of UOP Selexol TM process Selective removal of H 2 S, COS, & CO 2 via absorption/ regeneration process Offered as licensed technology Uses a next generation physical solvent (SELEXOL MAX Solvent) from DOW Chemicals Uses a typical solvent-extraction flow-scheme Loading directly proportional to partial pressure Product Quality Can be essentially sulfur free Project specific CO 2 capture and quality Project specific acid gas H 2 S concentration Treated Gas Acid Gas Physical vs Chemical Typical Gasification Application Feed Gas Solvent Loading Physical Solvent Chemical Solvent Partial Pressure High Pressure is advantageous 8 UOP

9 SELEXOL MAX Solvent Characteristics SELEXOL MAX Solvent: A physical solvent Chemically similar and completely compatible with SELEXOL Solvent Clear fluid that looks like tinted water Regenerated by changing pressure, temperature or applying a stripping gas Unique selectivity characteristics desirable for gasification syngas treating Relative Solubility Data H 2 ~ 1 CO ~ 2.2 CO 2 ~ 76 COS ~ 175 H 2 S ~ 680 CH 4 ~ 5 SELEXOL MAX Solvent = Selective 9 UOP

10 Two Basic Flow-schemes Sulfur removal only Typically for power applications Can reduce treated gas to any desired sulfur level One solvent absorber with solvent regeneration Sulfur removal with separate CO 2 removal (CCS or chemicals production) Typically for chemicals, SNG or coal to liquids applications Involves more stringent product specifications Integrated solvent absorbers and solvent regeneration 10 UOP

11 Process Flow Schemes Sulfur Removal & CO 2 Capture Conventional Treated Gas CO 2 Absorber CO 2 CO in the CO 2 stream is ~500 ppmv CO 2 purity as high as 99.7 mol% Sulfur in treated gas to less than 0.1 ppmv CO 2 in treated gas below 1% is achievable Sulfur in CO 2 as low as 2 ppmv Adjustable acid gas composition Stripper Acid Gas Lean Solution Filter Reflux Accumulator Feed Gas Sulfur Absorber H 2 S Concentrator Reflux Pump Makeup Water Export Water Packinox Exchanger Stripper Reboiler 11 UOP

12 UOP SeparALL Process Advantages Mild chilling Simple flow schemes with few pieces of equipment Reduced solvent losses Absorbs NH 3, HCN and other trace contaminants, without the need for additional equipment Removes metal carbonyls Metal carbonyls in treated syngas decompose at gas turbine burners and potentially plate-out on the gas turbine blades Metal carbonyl can also act as catalyst poisons for chemical applications Through its improved efficiency and next generation technology, the SeparALL process can reduce capital expenditures by up to 10 percent and operating expenditures by more than 20 percent. 12 UOP

13 Improvements in Next Gen SeparALL Process Enhancements include: - New SELEXOL MAX solvent - Use of static mixers - Nitrogen stripping (when appropriate) - Low pressure reabsorber column - High efficiency equipment Packinox heat exchangers Raschig column internals/packing Integrated optimization includes: - Detailed study on the impact of acid gas H 2 S% on the SeparALL unit and SRU unit - CO shift location - Use of hot syngas as heating media for SeparALL Process reboiler - SRU/ PSA tail gas recycle streams Next Gen SeparALL process substantially improves Economic Lifecycle Costs UOP UOP

14 SeparALL Competitiveness Case Study - SNG Feed Properties Flow Rate, Nm3/h 3,300,000 H 2, mol% 47.0 CO, mol% 14.0 CO 2, mol% 38.0 H 2 S, mol% 0.5 Product Requirements H H 2 /CO molar ratio 3 CO 2, mol% 3 H 2 S to SRU, mol% >30 Total sulfur, ppmv <0.1 Million $ $450.0 $400.0 $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 CAPEX Initial Solvent Fill Equipment Million RMB/y OPEX Solvent reload Nitrogen CW MP Steam LP Steam Power $- SeparALL Others - SeparALL SeparALL s CAPEX advantage contributes to improving SNG plant economics UOP

15 SeparALL Competitiveness Perceptions/ Reality Capex Opex Initial Solvent Sensitivity of SeparALL ELC, $M Downside Upside AGR more sensitive to CAPEX than OPEX Solvents SeparALL CAPEX (including initial solvent cost) Solvent payback period Solvent losses & inventory costs Solvent supply guarantee OPEX Solvent has high CO 2 absorption capacity resulting in increased gas processing capacity Substantial process optimization to reduce both CAPEX and OPEX Utilization of hot syngas in regenerator reboiler Colder lean solvent temperature to maximize solvent acid gas capacity Colder semi-lean solvent temperature to enhance solvent acid gas capacity Non-thermal solvent regeneration at higher pressure reduces recycle compression power Internal heat integration reduces refrigeration demand 15 UOP

16 Commercial Experience in Gasification Plant Start-up Application Production Feedstock Sarlux IGCC Italy 2000 Power H2 Production 550 MW net Nm³/h Visbreaker Residue API IGCC Italy 1999 Power 250 MW net Visbreaker Residue Coffeyville Resources USA 2000 Ammonia Urea 21 T/h 62 T/h Petcoke OPTI Canada Canada 2008 H2 Production & Fuel Gas 337,000 Nm³/h syngas Asphaltene Residue Duke Energy IGCC 2012 Power ~600MW net Coal 16 UOP

17 To summarize Drivers Technology Economics Acid Gas Removal PSA Sulfur Recovery Our technologies and products are designed to deliver superior performance, safety and value when considered for a gasification project: Enhanced availability and reliability of processes and products Lower capital expenditure and operating costs resulting in lower cost of production 17 UOP

18 Q u e s t i o n a n d A n s w e r 18 UOP