OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 15 -- Japan and Australia are expected to sign an agreement next month or possibly later to work together on a project to convert low-quality coal into natural gas, according to Japanese media.
The Nikkei Business Daily (NBD) reported that the two governments are expected to start building a large trial facility in Victoria state in the year ending Mar. 31, 2012. The report said the construction contract will likely be awarded to Nippon Steel Engineering Co.
The pilot plant is scheduled to begin operating in fiscal 2014, and large commercial plants would be built at a cost of as much as ¥100 billion, if the initial tests prove successful.
With an eye toward exporting gas output to Japan and elsewhere, the plant also is expected to be equipped with an LNG production facility, with commercial production coming online as early as in fiscal 2015.
According to NBD, a commercial plant will be capable of producing more than 300,000 tonnes/year of gas, which is equal to about 0.5% of Japan's annual LNG imports.
Nippon Steel Engineering has the technology to boost the energy efficiency of the coal gasification process to 85%, the highest level in the world.
The technology is also expected to reduce carbon dioxide emissions from the process by nearly 10% compared with the discharges from US coal gasification plants.
The Japanese-Australian project will have an even smaller carbon footprint because carbon dioxide emissions are expected to be captured and stored underground.
The report added that Japan also aims to build similar coal gasification plants in the Asia-Pacific region, where large low-quality coal reserves are found.
Contact Eric Watkins at firstname.lastname@example.org.