Gasification, polygeneration capture interest of refiners

L.R. Aalund
Managing Editor-Technology

Integrated gasificaion combined cycle (IGCC) plants are moving into the mainstream of international refining.

Such plants can turn refinery dregs into the whitest of all products-sparkling electricity-plus hydrogen and synthesis gas. Hydrogen is an indispensable element for cleaning up and improving modern fuels, while syngas is the feedstock for important finished petrochemicals and intermediaries.

It takes pure oxygen to make this work, so stand-alone air separation plants are necessary.

Fig. 1 [21348 bytes] illustrates this synergy; the basket of possible feedstocks and the cornucopia of products.

If all this isn't enough, GCC at a refinery can solve some tough environmental problems at the same time.

Too good to be true? Not entirely, but it does take hard work and hard money to reach these rewards.

The status and potential of gasification technologies and projects were covered in a 3 day conference early in October in San Francisco. The Electric Power Research Institute (EPRI) and the Gasification Technologies Council of Arlington, Va., a privately funded organization founded in 1995, sponsored the conference. Nearly 300 registrants, many from overseas, turned out for it.

What made this conference different from others on the subject in the past was recognition that oil and natural gas producers and the international refining industry are becoming major power producers without government subsidies. Such projects can pass the scrutiny of lenders and the test of commerciality.

They are not targeted simply for electricity, but also for production of hydrogen, steam, and petrochemical feedstock. The process objective for projects now far exceeds simple cogeneration. It's now trigeneration, even polygeneration.

Variables

Some complicated variables, including government regulations, technical advances, and the refined product market, have lined up and are flashing the "go" signals for IGCC projects.

But there are hurdles. They are the pioneering nature of these projects in refineries, the large investments needed, and the complex financing schemes required. Bankers give the projects intense study, even in some cases specifying design criteria, and equipment redundancy and capacity. Nevertheless, major commercial projects are moving ahead at refineries in the U.S., The Netherlands, and Italy.

An excess of base load generating capacity in the U.S. may be dampening activity there. That is not the case in Italy, where three major projects are moving ahead without government loan guarantees or subsidies. They will be models for development elsewhere.

Big picture

Dale R. Simbeck, vice-president, technology, for SFA Pacific Inc., Mountain View, Calif., a keynote speaker at the conference, unraveled the technical, regulatory, and market complexities surrounding the surge of activity in GCC systems.

"Gasification," he said, "is pretty old hat." It was practiced in a primitive form nearly 200 years ago. In more recent years, it has been a step in the production of chemicals and liquid fuels starting in most cases from coal. It was essential in fueling Germany during World War II and South Africa while it was isolated by apartheid sanctions. As a result, South Africa's huge coal-based complexes at Sasolburg and Secunda have spawned advanced technologies now being marketed worldwide by Sastech (Pty) Ltd.

Simbeck reported that worldwide there are 354 gasifiers running in 113 facilities. They produce 10 billion cu ft/day of syngas. Of this, 8% comes from gas, 47% from resid, 3% from petroleum coke and some refinery wastes, and 42% from coal. The practice is to convert the feed to carbon monoxide and hydrogen, which is why gas, methane in this case, is defined as being gasified.

Of the output, 26% goes to liquid fuels, 5% to gaseous fuels, 45% to chemicals, and 24% to power.

In addition to technical advances, the deregulation of power in the U.S. and elsewhere has catalyzed the initial activity in combined cycle plants. U.S. laws allowed creation of independent power producers (IPPs) and assured them utility buyers for their electricity.

This was a license to steal in the early 1980s because utilities did not need the new power but were forced to buy it because of the Public Utility Regulatory Practices Act, Simbeck said.

The cogeneration projects that jumped in to take advantage of this new market did not employ gasification and had simple objectives, mainly to make steam and sell electricity.

Nevertheless, they "let the genie out of the bag," Simbeck says because they showed that plants outside the utility gate could profitably participate in power generation.

Now the driving force is a refiner's need to get rid of undesirable products and reduce emissions while making electricity, steam, synthesis gas, and hydrogen. Gasification is the key to this.

Simbeck points out that the word "integrated" in IGCC was originally a designation that meant integrated with an existing power utility. GCC, he says, is sufficient to describe refinery systems.

Nevertheless "integration" seems to have taken on a new meaning in the refining context, describing the integration of hydrogen, steam, and electricity with the host refiney.

Oil refining

"The oil industry could represent the future of power generation, thanks to deregulation," Simbeck said.

"Power generation," he says, "has become the key option for undervalued natural gas in areas of the world where oil companies are developing oil and gas reserves. In the future, oil refineries could comprise a major segment of the power industry, thanks to gasification-based power generation and the lack of high value markets for low quality residues and coke."

With reference to the hoops refiners have had to jump through in the past two decades to meet federally mandated fuel standards, Simbeck said, the great advantage to refiners for producing electrons instead of gasoline is that electricity is the only product on which the government can't change the specification."

He calculates that if all refiners worldwide satisfied their net steam requirements from heat recovery steam generators (HSRGs) downstream of combustion turbines, they would generate 200 gigawatts (200 trillion watts) of electricity. Current U.S. capacity is 710 gigawatts; worldwide it is about 3,000 gigawatts.

In addition to entering the electricity market, there are several other major incentives for refiners to gasify.

The market for high-sulfur, high-metals coke and residues is creating low, even negative-value products that are excellent candidates for gasification and use in the combined cycle systems.

Oxygen is, in a sense, one of the feeds to the gasification plant. M.J. van der Burgt, an energy consultant from Akersloot, The Netherlands, with extensive experience in Shell International technology, cautioned that, though the residues could be without value, the oxygen also a feedstock is not free.

He says that a rule of thumb is that a typical gasification unit requires about 1 ton of oxygen per ton of hydrocarbon feed. He calculates the unit Shell is building at Pernis, The Netherlands, will require 0.84 metric tons/ton of hydrocarbon feed. Oxygen there will cost about $30/ton. Oxygen plants also produce useful nitrogen gas and rare or noble and quite valuable gas by-products such as argon and krypton.

Environmental incentive

William E. Preston, of Texaco Inc., Houston, highlighted an important environmental incentive for gasification in the U.S.

The company's pioneering gasification project at its El Dorado, Kan., refinery received approval from the U.S. Environmental Protection Agency (EPA) to gasify the refinery's hazardous wastes in its new Texaco Gasification Power System (TGPS) plant (OGJ, Aug. 5, p. 31).

This plant will not be subject to the U.S. Resource Conservation and Recovery Act (RCRA). By granting this exemption, the EPA made a clear distinction between burning hazardous wastes and gasifying them to make products.

Had the refinery "K" wastes been defined as hazardous wastes rather than gasifier feed, they would have come under RCRA. This would mean expenses for disposal and the risk of long-term liabilities.

Another important environmental benefit repeatedly stressed at the conference is that IGCC systems produce more electricity with lower emissions than conventional systems.

This superior performance may eventually haunt the big utilities generating electricity with traditional direct steam cycle systems, said Simbeck. For now, emission requirements for electric utilities are significantly less stringent than for oil and chemical companies. It is unlikely this situation will be allowed to continue indefinitely.

For this reason, Simbeck believes that as long as natural gas remains cheap, new power generation capacity in the U.S. will come from natural-gas-fired combustion turbines. The near-term dominance of combustion-turbine-based power generation is the key to the long-term dominance of gasification, Simbeck said.

Good technology

IGCC technology is in an advanced state of development. In addition to gasification, other key process steps in GCC are air separation to provide oxygen for combustion, heat recovery and utilization, gas purification, sulfur recovery, and combustion in combustion turbines.

For each of the key GCC process units, Simbeck said, there are three to six quality vendors. This competition has led to major cost reductions and performance improvements in all important units.

Advances in combustion turbines are a major element in this upsurge. Simbeck said, "Anyone who flies in commercial aircraft is well aware that combustion turbines are among the most reliable technologies developed."

Refinery projects

Major refiners and oil companies are well versed in raising the large sums of money that are needed for IGCC plants. Three Italian plants planning on completion in the year 1999 are costing between $500 million and over $1 billion each. Their financing will probably serve as the model for future projects.

The 550 mw Sarlux SpA IGCC in Sarroch, Sardinia, will cost over $1 billion (OGJ, Oct. 21, p. 33). (The project total includes "soft costs," from project development and interest during construction. These are quite high in Italy). It is a joint venture of Saras SpA Raffinerie Sarde and Enron Corp.

Two other Italian projects are the 500 mw IGCC plant at ISAB SpA's 257,000 b/d refinery at Priolo Gargallo, Sicily, and the 280 mw api Energia SpA plant at the 80,000 b/d Falconara Marittima refinery near Ancona on the Adriatic. This project is described in detail in the following article.

Mission Energy, London, an independent power producer affiliate of Southern California Edison is a partner in the ISAB project.

The Italian plants all have at least two things in common. They will use the Texaco Gasification Process and sell power to the Italian electricity grid, which is owned by ENEL, Italy's state-owned power company.

Another major European IGCC is being built at Shell Nederland's 374,000 b/d Pernis refinery. It will employ the Shell Gasification Process to gasify 1,650 ton/day of residue.

Two thirds of the syngas produced will be used to produce hydrogen, and the remainder will be combusted in combined cycle turbines to make 115 mw of electricity. Shell, in its presentation at the conference, did not reveal the quantity of power that will be generated by its steam turbines or the investment cost for the plant.

Star Enterprise, the Texaco Inc. and Saudi Aramco refining venture, plans an IGCC plant at its 140,000 b/d Delaware City, Del., refinery. It will of course employ the Texaco Gasification process.

Exxon Chemical Co. reportedly plans an IGCC plant at Baytown, Tex. A paper titled "Baytown Syngas Project" scheduled for the conference was not delivered or available.

China is also a major potential market for GCC, just as it is for every other item known to mankind. Deregulation is necessary there.

Japan is also seriously considering a host of GCC projects, several of them at refineries.