China should restrict small-sized coal-to-gas projects - expert
Shanghai. August 29. INTERFAX-CHINA - China should restrict approval of coal-to-gas projects that produce less than two billion cubic meters (bcm) of natural gas annually due to cost concerns, a senior industry expert said Aug. 27.
The viability of such small-scale projects is being threatened by high coal prices, which have surged following the disaster at Japan's Fukushima Daiichi nuclear plant in March, according to Liang Longhu, a senior expert from China Petrochemical Corp.'s (Sinopec) Luoyang Oil and Petrochemical Design Institute.
"Coal-to-gas projects are very vulnerable to rising coal prices as the cost of coal accounts for more than 60 percent of these projects' total cost," Liang said in a workshop at the 2011 Henan Coal-to-Chemical Technology Forum in Zhengzhou, capital of Henan Province.
In addition, the expense of laying natural gas pipelines makes small-sized coal-to-gas projects uneconomical, Liang said. Such projects already face pressure on environmental grounds as they consume large quantities of water and emit significant amounts of carbon dioxide, Liang noted.
China has more than 30 coal-to-gas projects planned or under construction. Those projects have a combined annual natural gas production capacity of approximately 150 bcm, according to the China Petroleum and Chemical Industry Federation.
-WV
