Underground Gasification Technology (UCG): Click to edit Solution to Produce Master subtitle Electricity, style Natural Gas and

Diesel By
Ajie Ekpere Reuben-Denzel {IAPM-CIPM,PMP} Project Controls Director HydroEssence Inc.

3/22/13

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Contents of this presentation

Advancement in UCG Technology Some Questions to Consider UCG UCG Market Brief Timeline for Gas Supply Chain Opportunity UCG World Sites && Lessons Learned Best UCG Practices Principles Essentials Conclusions UCG? References

Cost Analysis & Attractiveness Thank You UCG Development & Process Advancement in UCG 3/22/13
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Some Questions to Consider

What is possible?

What are the risks?

What do we know, and dont know, about the

technology?

What is the feasibility of applying

underground gasification technology?

o What are the Economic & Environmental

Benefits?
o What is driving the UCG technology?
3/22/13 o What 33 is the possibility that we aim too low or

UCG Brief Timeline

The earliest recorded mention of the idea of

underground coal gasification was in 1868, when Sir William Siemens in his address to the Chemical Society of London suggested the underground gasification of waste and slack coal in the mine. Russian chemist Dmitri Mendeleyev further developed Siemens' idea over the next couple of decades

1912 Co. Durham UK First Test 1930s Intensive Soviet Development

3/22/13 1950/60s Early European Trials Inc. 44

UCG WORLD SITES

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Source:(Fire in the

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UCG PRINCIPLES & ESSENTIALS

Underground Coal Gasification (UCG) converts coal into a

gaseous form (syngas) through the same chemical reactions that occur in surface gasifiers
The economics of UCG look promising as capital expenses

are considerably less than surface gasification

Essentials:
o Site location -biggest issue o Coal characteristicsoperations o Technologies-connecting wells o No authentic publication of figures in literature for carrying out

cost economics

o Costing of a UCG Project and economic calculations thereof 66 are 3/22/13 a challenge to all first timers

Underground Gasification
Underground coal gasification (UCG) is the in-situ conversion of coal into combustible . gases (CO, H2 & CH4) A complex process involving o chemical reactions o heat and mass transfer o complex flow dynamics & o growing cavity dimensions Advantages over conventional process are Low dust and noise No ash handling at power stations No coal stocking and transportation Larger coal resource exploitation Converts sulphur (S) to H2S and nitrogen (N) to NH3 instead of SO2 and Nox Disadvantages Surface subsidence Aquifer water contamination

Technology?

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UCG in Action

Source: 3/22/13 http://www.cougarenergy.com.au/what_is_ucg.ph

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Cost Analysis UCG for Electricity

Even though the syngas obtained from a UCG operation can

be used in many applications, such as the production of chemicals (e.g., hydrogen, ammonia, or methanol), or liquid fuels, the primary use is for electricity generation

According to the information developed by GE and Bechtel

(Bechtel and General Electric, 2005), the cost of a supercritical pulverized coal (SCPC) power plant ranges from 1200 to 1460 $/kW. The same study estimates that the next generation of IGCC power plants will be about 10% more expensive than the SCPC plants (vs. the current 20 to 25 % premium)

This places the cost of IGCC plants at 1440 to 1750 $/kW

current technology, and 1320 to 1600 $/kW (advanced 3/22/13 99 technology). Dalton has estimated the cost of an IGCC plant

Costs for Production and Electricity Produced

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Source: Rembrandt

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Cost Analysis UCG for Electricity

Another measure of cost competitiveness is

the cost of electricity (COE). Dalton has estimated the COE for SCPC and IGCC plants at $46.6/MWh and $49.9/ MWh, respectively (Dalton, 2004)

Based on the numbers published by Ergo

Exergy (Blinderman, 2002), UCG-based plants are significantly cheaper to build, and they have a lower COE. The costs presented by Blinderman shows that the capital cost of an 3/22/13 1111

Cost Attractiveness of UCG

Most conventional mines require a large capital

injection upfront, with operators having to wait several years for any return on investment. With UCG, the capital invested for the recovery of the gas should be much lower and will tend to be phased throughout the project as new panels are developed. Coal transportation costs are also eliminated
It is estimated that the upfront capital

requirement will be typically only around 10% of that required for traditional mining, while the 1212 3/22/13

Cost Attractiveness of UCG

Low-cost Source of Hydrocarbons:
No mining No purchase of coal; no ash management No gasifier purchase or operation High pressure syngas stream = low cost CO2

separation
No particulates or NOx; sulfur management

straightforward

Good coincidence between CCS and UCG sites

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Costs for Natural Gas per MMBTU for Comparison

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Source: Rembrandt

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UCG Development
There has been significant developments in New generation of UCG:
o Horizontal well technology o Adoption of oil and gas technology for reliability

UCG modeling, design and resource building

and repeatability
o Increased resource recovery and generator life o Oxygen enrichment o Increased capital efficiency.
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o Visible progress towards commercialization.

The UCG process

With underground coal gasification (UCG), the actual

process takes place underground, generally below 1,200 feet. The underground setting provides both the feedstock source, as well as pressures comparable to that in an aboveground gasifier.

With most UCG facilities, two wells are drilled on either side

of an underground coal seam. One well is used to inject air or oxygen (and sometimes steam) into the coal seam to initiate the gasification reactions.

The second well is used to collect the synthesis gas (syngas)

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that is formed from the gasification reactions and to pipe it 1616 to the surface for additional processing and use. A pair of

Underground Coal Gasification Process

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Source: Rembrandt

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Underground Coal Gasification Process

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Source: Ergo Energy

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Advancement in(UCG) Technology

A new technology was announced in May 2012 by developer

Portman Energy wherein a method called SWIFT (Single Well Integrated Flow Tubing) using a single vertical well for both Syngas recovery and oxidant delivery.
The design has a single casing of tubing strings enclosed,

filled with an inert gas to allow for leak monitoring, corrosion prevention and heat transfer.
A series of horizontally drilled lateral oxidant delivery lines

into the coal and a single or multiple syngas recovery pipeline(s) allow for a larger area of coal to be combusted at one time. The developers claim this method will increase the syngas production by up to ten (10) times prior design approaches and the single well design mean development costs are significantly lower and the facilities and wellheads 3/22/13 1919 are concentrated at a single point reducing surface access

Advancement in UCG Technology,

injection point (CRIP) configuration

using the controlled retracting

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Source:frack-

2020

Advancement in (UCG) Technology

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THE Cougar Energy

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Converting Un-mineable Coal

UCG can help meet the rising energy demand by converting

coal to energy and products, utilizing resources that otherwise would be too deep, of poor quality, or simply not economical to mine

Estimates suggest that UCG could help increase the

recoverable coal reserves by as much as 300%-400% (Accelerating Development of Underground Coal Gasification, Dr. S Julio Friedman, Lawrence Livermore National Laboratory, 2007)

In general, UCG can operate at up to about 80% efficiency

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that is, the amount of the syngas energy recovered at the 2222 surface is about 80% of the original heating value of the

Economic Benefits of UCG

No need for the coal to be mined No need for coal handling No need to transport the coal

There are a number of significant economic benefits associated with UCG that include:

No need to prepare the coal to be fed into a

reactor

No need for disposing of ash or slag No need for an above ground gasification
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plant

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Environmental Benefits of UCG

Minimal land use

There are also a number of environmental benefits with UCG:

Significantly reduced use of groundwater

or freshwater

Underground saline water is used

o No environmental impacts traditionally

associated with coal mining and handling

3/22/13 drinking

o Coal seams being gasified are below the fresh

water supplies

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Achieving the gas demand with ucg

Research has shown that Gasification can be used to

produce substitute natural gas (SNG) from coal. Using a methanation reaction, the coal-based syngas- mostly carbon monoxide and hydrogen are convertible to methane.

Almost chemically identical to conventional natural gas, the

resulting SNG can be transported in existing natural gas pipeline networks and be used to generate electricity, produce chemicals/fertilizers, or heat homes and businesses. Increased production of SNG will enhance domestic fuel security by displacing imported natural gas that is likely to be supplied through Cross Country pipelines or in the form of Liquefied Natural Gas (LNG)
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UCG Market
Today, the most UCG activity is occurring in

Australia, China, and South Africa - with China having the largest UCG program worldwide. Canada and the U.S. In addition, India and New Zealand have begun the initial efforts to explore UCG. Several of these projects involve carbon capture and sequestration.

There are a limited number of projects in

UCG does face a number of issues, including:

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o A number of coal seams may not be suitable for

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Opportunities for Gas Supply

The availability of feed stock and its price is most important

for efficient production of fertilizer and its competitive cost. Natural Gas is preferred Feed Stock because it is a clean and efficient feed / fuel as compared to liquid fuels.

The total reserves of Natural Gas in the world are 6040 TCF.

With the present reserve to production ratio the reserves will last up to 70 years

More than 70% of the World production of Urea is based on

Natural Gas. It is no longer news that it is in short supply to many fertilizer plants globally.
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Opportunities for Gas Supply

Today the opportunities to supply gas directly to fertilizer

plants exist worldwide, regionally and nationally as most national governments are struggling today with managing the allocation of available gas resources sector wise.
This has given rise to continued search for commercially

sustainable alternative gas supply sources as feedstock to fertilizer plants to meet its sectorial demand and to remain optimally functional and competitive.

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Best Practices and Lessons Learned

The extensive experience, lengthy literatures, and current

commercial experiments with UCG provides enough information to begin to distill a few key learnings. These are meant to advise potential investors, operators, regulators, and decision makers in planning, approving, and ultimately operating UCG sites.

These learnings have been reduced to a few quick

discussion points:
o Geological characterization of a site is central to technical

success and environmental risk management

o Advanced simulation can help provide insight into planning

surface facilities, operational programs, and environmental due diligence 3/22/13 2929

Conclusion
The technologies of UCG have been

technically proven to work at numerous locations and different depths ranging from several hundred metres up to 1.4 km of depth.

The economics look promising with costs

competitive to natural gas and coal markets. Furthermore, a combination with gas-to-liquids technology would enable the production of fairly cheap synthetic diesel. These possibilities together with the potential to unlock vast new coal seams unavailable via 3/22/13 3030 conventional mining make UCG an important

References
Blinderman, M.S., 2005a, UCG History.

http://www.ergoexergy.com/eUCG_his.htm www.ergoexergy.com/eucg.htm

Blinderman, M.S., 2005b, UCG. http:// Bechtel and General Electric, 2005, About IGCC Power.

http://www.cleanenergy.us/facts/igcc.htm

Beyer, L., et al., 1986, Large Scale Apparatus for Simulating UCG,

Proceedings of the Twelfth Annual Underground Coal Gasification Symposium, DOE/FE/60922-H1. Stephens, 1980, Highlights of the LLL Hoe Creek No. 3 Underground Coal Gasification Experiment., Lawrence Livermore National Laboratory, Livermore, CA. UCRL-83768.

Aiman, W.R., R. J. Cena, R.W. Hill, C. B. Thorsness, and R. R.

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THE END

Thank You and God bless

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