Crude oil and natural gas prices are high, bringing coal as a low-cost source of alternative energy and raw materials. More and more US companies are turning their attention to coal. Compared with low-cost regions such as the Middle East and Latin America, the competitiveness of the North American petrochemical industry has been weakened, and the development of coal as a source of raw materials will enable it to regain its glory.
Abundant reserves and low prices North America has rich coal resources, and has more than 25% of the world's coal reserves. Only US coal resources can be used for more than 250 years. The energy value of coal reserves exceeds the energy value of the Middle East oil reserves. In the United States, coal prices have been stable at 1 to 2 U.S. dollars per million British thermal units over the past 10 years, and natural gas prices have risen from about 2 U.S. dollars per million British thermal units to between 5 and 12 U.S. dollars per million in recent years. Thermal unit. At the same time, the price of crude oil has continued to rise in the past 8 to 10 years and is now over US$50/barrel.
Changes in the prices of natural gas and crude oil make it difficult for chemical producers to plan their costs and achieve profitable growth. Under the situation of high and volatile crude oil and natural gas prices, coal has been rekindled by US companies’ interest in coal-based chemical projects because of the stable and low price of coal.
Many companies have coal gasification technology
From a technical point of view, coal gasification technology is very clean and there are many technology providers, such as ConocoPhillips, GE Energy, Lurgi, Shell, and Wood. In terms of competitiveness, coal-based chemicals are mainly affected by the trend of oil and natural gas prices relative to coal.
Eastman is the only company in the United States that uses coal as a raw material for the commercial production of chemicals. The company expects crude oil and natural gas prices to exceed US$45/barrel and US$5/million BTU respectively. For Eastman, as long as crude oil prices stay above US$40-45/barrel, investment opportunities in coal chemical products are extremely attractive.
A batch of projects will be implemented one after another
Eastman plans that in the next 5 to 7 years, the company’s production of chemicals based on coal-based raw materials will increase by more than one time, and the proportion of total chemical production will increase from 20% to 50%. Eastman, Tennessee, USA Eastman operates an IGCC coal gasification unit using GE Energy Technologies. Eastman's coal-based chemicals currently generate approximately half of the company's total revenue.
Eastman also intends to build more gasification projects, convert methanol to propylene in Texas, and convert methanol to ethylene glycol in another region. These projects are expected to start production around 2011. The company also conducts research on projects that use coal to produce other products such as methanol, natural gas, and paraxylene. These projects are either built in the United States or in other regions of the world where coal or petcoke resources are abundant. Eastman's internal rate of return for these new projects is more than 15%.
BASF is considering the use of alternative materials including coal in several chemical processes. However, the company stated that oil and natural gas are still the most attractive raw materials in most chemical processes. However, with the exception of China and South Africa, it is appropriate to use coal as a raw material in these areas.
North American nitrogen fertilizer companies are also exploring the possibility of using coal as a raw material. Agrium is using a coal gasification technology program for its nitrogen fertilizer plant in Alaska, which has been plagued by natural gas shortages. If the project is implemented, it will be put into operation before 2011.
Sasol is currently evaluating several CTL projects using the Fischer-Tropsch process in coal-rich areas including Illinois, Montana and Wyoming. The company said that preliminary studies have proven that these projects are potentially viable. However, challenging issues such as high construction costs, product acquisition agreements, viable CO2 management programs, and federal and state government incentive policies have not yet been fully resolved.
However, the development of coal chemical industry is not all a voice of praise. The latest study released by Nexant Chem Systems concluded that, with a natural gas price of US$6.55 per million Btu, most coal-based chemicals are generally not available, except for methanol-based products such as acetic acid and formaldehyde. Natural gas competes with raw chemicals. For linear low density polyethylene and vinyl chloride, products produced from coal are not cost-competitive compared to products made from natural gas that is priced at $5 to $6 per million British thermal units. . However, in the case of natural gas prices reaching $10 per million British thermal units, coal-based chemicals are economical even without government incentives.
Abundant reserves and low prices North America has rich coal resources, and has more than 25% of the world's coal reserves. Only US coal resources can be used for more than 250 years. The energy value of coal reserves exceeds the energy value of the Middle East oil reserves. In the United States, coal prices have been stable at 1 to 2 U.S. dollars per million British thermal units over the past 10 years, and natural gas prices have risen from about 2 U.S. dollars per million British thermal units to between 5 and 12 U.S. dollars per million in recent years. Thermal unit. At the same time, the price of crude oil has continued to rise in the past 8 to 10 years and is now over US$50/barrel.
Changes in the prices of natural gas and crude oil make it difficult for chemical producers to plan their costs and achieve profitable growth. Under the situation of high and volatile crude oil and natural gas prices, coal has been rekindled by US companies’ interest in coal-based chemical projects because of the stable and low price of coal.
Many companies have coal gasification technology
From a technical point of view, coal gasification technology is very clean and there are many technology providers, such as ConocoPhillips, GE Energy, Lurgi, Shell, and Wood. In terms of competitiveness, coal-based chemicals are mainly affected by the trend of oil and natural gas prices relative to coal.
Eastman is the only company in the United States that uses coal as a raw material for the commercial production of chemicals. The company expects crude oil and natural gas prices to exceed US$45/barrel and US$5/million BTU respectively. For Eastman, as long as crude oil prices stay above US$40-45/barrel, investment opportunities in coal chemical products are extremely attractive.
A batch of projects will be implemented one after another
Eastman plans that in the next 5 to 7 years, the company’s production of chemicals based on coal-based raw materials will increase by more than one time, and the proportion of total chemical production will increase from 20% to 50%. Eastman, Tennessee, USA Eastman operates an IGCC coal gasification unit using GE Energy Technologies. Eastman's coal-based chemicals currently generate approximately half of the company's total revenue.
Eastman also intends to build more gasification projects, convert methanol to propylene in Texas, and convert methanol to ethylene glycol in another region. These projects are expected to start production around 2011. The company also conducts research on projects that use coal to produce other products such as methanol, natural gas, and paraxylene. These projects are either built in the United States or in other regions of the world where coal or petcoke resources are abundant. Eastman's internal rate of return for these new projects is more than 15%.
BASF is considering the use of alternative materials including coal in several chemical processes. However, the company stated that oil and natural gas are still the most attractive raw materials in most chemical processes. However, with the exception of China and South Africa, it is appropriate to use coal as a raw material in these areas.
North American nitrogen fertilizer companies are also exploring the possibility of using coal as a raw material. Agrium is using a coal gasification technology program for its nitrogen fertilizer plant in Alaska, which has been plagued by natural gas shortages. If the project is implemented, it will be put into operation before 2011.
Sasol is currently evaluating several CTL projects using the Fischer-Tropsch process in coal-rich areas including Illinois, Montana and Wyoming. The company said that preliminary studies have proven that these projects are potentially viable. However, challenging issues such as high construction costs, product acquisition agreements, viable CO2 management programs, and federal and state government incentive policies have not yet been fully resolved.
However, the development of coal chemical industry is not all a voice of praise. The latest study released by Nexant Chem Systems concluded that, with a natural gas price of US$6.55 per million Btu, most coal-based chemicals are generally not available, except for methanol-based products such as acetic acid and formaldehyde. Natural gas competes with raw chemicals. For linear low density polyethylene and vinyl chloride, products produced from coal are not cost-competitive compared to products made from natural gas that is priced at $5 to $6 per million British thermal units. . However, in the case of natural gas prices reaching $10 per million British thermal units, coal-based chemicals are economical even without government incentives.
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