The energy market of the future is unlikely to be dominated by traditional mining and crude oil technologies. Australia is rich in coal resources yet relies on imported oil products for most of its transportation energy needs.
Australian company Linc Energy has successfully combined two technologies, Underground Coal Gasification (UCG) and Gas to Liquids (GTL), to provide Australia and other coal-rich nations with an opportunity to provide energy solutions from their own resources. The company began its UCG trials on rural farmland in Queensland’s coal-rich Surat Basin. Linc has since developed its demonstration facility near Chinchilla to become the world’s only facility to demonstrate the conversion of coal in-situ for the production of liquid hydrocarbons.
The Chinchilla Demonstration Facility showcases the combination of UCG to GTL. About USD50m has been invested in the facility to establish operations. Linc Energy’s UCG to GTL technical development has attracted specialised employees from all over the world. It employs the largest expert workforce in the industry.
Coal gasification is not new. It has been used since the 1800s to supply gas to cities and towns, generate electricity from gas turbine power stations, and produce synthetic liquid fuels. UCG has been utilised in both commercial and trial scales since the early 1900s. One commercial UCG operation remains in the former Soviet Union. Known as Yerostigaz, this operation continues to supply UCG synthesis gas to a nearby power station to substitute their conventionally-mined coal supply. Linc Energy has a controlling interest in Yerostigaz and is working to improve production and capture intellectual property from its forty-plus years of operation.
UCG technology allows energy to be recovered from deep, lower rank coals that are otherwise worthless to conventional miners. UCG converts coal into a synthesis gas (syngas) of primarily carbon monoxide and hydrogen while it is still in the ground.
To achieve the conversion of coal into gas, an oxidant is injected into the coal seam. The coal seam is then ignited. The heat generated from combustion, in combination with the water in the coal seam, allows for the conversion of the coal to syngas. The syngas product is then extracted from a production well for downstream use. This has a number of uses. The syngas product can be used in a variety of industrial processes including power generation, liquid fuel production, and chemical manufacture. It is a suitable feedstock for gas turbine power generation and is ideal for the GTL process which works to produce cleaner liquid transportation fuels, such as diesel and jet fuel. Fertilisers, base oils, and waxes are all possible downstream products from UCG syngas. Linc Energy is focused on UCG for cleaner power generation and fuel production. Due to its ability to extract otherwise worthless coal, the use of UCG could potentially increase global coal reserves from 900bn tonnes to 1.5trn tonnes (World Energy Council, 2007).
At Chinchilla, the production of cleaner synthetic hydrocarbons from UCG syngas takes places aboveground in a GTL facility. UCG syngas is fed through a processing plant to clean the gas, removing contaminants. The key component of the GTL facility is the Fischer-Tropsch reactor. The Fischer-Tropsch reactor contains a catalyst to transform the clean gas into liquid hydrocarbons.
Synthetic liquid hydrocarbons can then be refined to produce high quality, zero sulphur, cleaner diesel and jet fuel. Due to the removal of impurities before the gas is converted to liquid and the highly paraffinic nature of the fuel, GTL products have superior properties in terms of combustion efficiency and emission characteristics.
GTL fuels are compatible with old, existing and future diesel engine technologies. This means that GTL fuels can be directly substituted for traditional fuels, negating the need for large scale vehicle and infrastructure fleet modifications. The air quality in our cities could be significantly improved with the use of GTL synthetic fuels from UCG syngas due to the lower tailpipe emissions or particulate matter and gaseous hydrocarbons.
In a carbon constrained world, UCG carries a number of environmental advantages. These benefits include a 25 percent decrease in greenhouse emissions for power generation; elimination of large scale soil and rock disturbance; elimination of dust, ash and slag generation; reduced visual impact; lower risk of surface water contamination; and a lower demand for water, as there is no need for coal dewatering or a coal preparation plant. For GTL operations, these include significant reductions in sulphur oxide, nitrogen oxide, heavy metals and particulate matter; and the reduction of solid waste.
To establish combined UCG to GTL technologies, modelling and prediction is highly important. Linc Energy has taken great measures to apply modelling applications to its trial operations to predict the nature of UCG and what actually happens underground. These models enable Linc Energy to significantly reduce the risk of groundwater contamination. With ten years of trials in Chinchilla, Linc Energy has never registered any groundwater contamination and maintains a rigorous monitoring and data capture programme. Subsidence models have also been prepared to minimise risk to the surface of the land. With the right geology, careful control of operating conditions and pillars deliberately left between different cavities, impacts can be minimised. Linc Energy is also working on a carbon sequestration project through Linc Carbon Solutions. The aim is to investigate a range of carbon dioxide reduction solutions, including carbon capture and storage and the commercialisation of photobioreactor technology to convert carbon dioxide into oxygen and biomass (algae).
Listing on the Australian Securities Exchanges in May 2006, Linc Energy now boasts a base of over 13,500 committed shareholders. A young company, Linc Energy has a solid coal resource position in Queensland and the US.
Options for the commercialisation of its UCG and GTL technologies are well underway. Drilling to locate UCG-suitable coal has taken place in Queensland’s Surat Basin and in the Arckaringa and Walloway Basins in South Australia. Results have indicated that the first UCG to GTL commercial operation will be established near the rural town of Orroroo, near Adelaide.
In preparation for UCG to GTL commercial operations and the production of 20,000 barrels of cleaner diesel per day, Linc Energy has a Memorandum of Understanding (MOU) with one of the world’s largest energy companies, BP Australia. This MOU defines BP Australia as Linc Energy’s first major customer, agreeing to purchase a minimum of 14,000 barrels per day of the product.
With its solid coal resource position in Australia, Linc Energy is also pursuing the commercialisation of its UCG and GTL technologies abroad. Locations in North America and South-East Asia are being evaluated for power and fuel production projects. In September 2009, Linc Energy completed the purchase of 94 coal leases containing over 92,000 acres in Wyoming’s Powder River Basin. A site office has been established in Wyoming to enable UCG trials to start for the production of UCG syngas. Linc Energy will also open a US head office in Denver to pursue other UCG and GTL projects.
In Vietnam, Linc Energy is working with VINACOMIN and Japan’s Marubeni Corporation to develop a trial UCG project in the Red River Delta. This region is in much need of power and if the trial is successful, a commercial UCG power project will supply over six million households with electricity. Combined UCG and GTL technologies and the products generated, present a compelling, alternative energy solution for Australia and other locations.
For more information www.lincenergy.com.au
