energy volume 11 issue 11-12 1986 [doi 10.1016_0360-5442(86)90047-2] ahmad mumtaz; arshad m. khan --...

8/12/2019 Energy Volume 11 Issue 11-12 1986 [Doi 10.1016_0360-5442(86)90047-2] Ahmad Mumtaz; Arshad M. Khan -- Pro

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Energy Vol. 11 No. 11/12 pp. 1103-1111 1986 0360-5442/86 3.00 +O.OOPrinted in Great Britain Pergamon Journals Ltd

PROSPECTS FOR COAL GASIFICATION IN PAKISTANAHMAD MUMTAZ and ARSHAD M. KHAN

P. 0. Box 1114, Islamabad, Pakistan

Abstract-Pakistan is currently facing serious energy supply problems. Energy demand has beenincreasing by about 8% per year during the last 12 yr and this trend is likely to continue. Since1980-81 the oil import bill has been consuming more than 50% of yearly export earning. As thereis not much scope for a sizeable increase in the domestic supply of gas, oil, or hydroelectric power,increasing the use of domestic coal is necessary to avoid excessive dependence on imported energy.Coal gasification to produce substitute natural gas (SNG) is not economical at present coalproduction costs, due to the low cost of indigenous gas and subsidized furnace oil and keroseneand the high SNG production costs from the technology available at present. If domestic pricesof gas and liquid fuels are increased to the level of current international oil prices and developmentsin coal gasification technologies can bring about expected reductions in capital costs andimprovements in efficiency, coal gasification may become economical in Pakistan. It is estimatedthat indigenous coal resources can potentially supply 3-6 million TCE/yr of SNG by 2OOC-aboutlo-20% of the substitutable fossil fuels demand for that year-along with meeting about 9% ofthe electricity demand.

INTRODUCTION

Pakistan is currently facing serious energy supply problems. About 90% of its oilrequirements must be met through imports, which have consumed more than 50% of thenational export earnings during the last few years. Natural gas production from existing

fields is approaching its technical limits. Due to inadequate availability of gas manyindustries have been asked to switch to alternate fuels. At the same time the share of oilin thermal generation has increased from about 1% in 1978-79 to about 33% in 1983-84. Still the country is experiencing acute shortages of power that result in frequent loadsheddings. As most of the easily exploitable hydroelectric power has already been developed,further developments will be expensive and will require large extensions in the transmissionnetwork. Domestic coal is poor in quality and not suitable for most industrial applicationsor household uses. In contrast to this supply situation, energy demand has been increasingvery rapidly. Commercial energy demand has increased by about 8% per year for the last12 yr. As there is not much scope for a sizeable increase in domestic supplies of gas, oil,and hydroelectric power, increasing use of domestic coal is necessary to avoid excessivedependence on imported energy. This paper will examine the prospects for coal gasificationin Pakistan in the medium and long terms.

PATTERNS OF ENERGY CONSUMPTION

During 1983-84 primary commercial energy consumption in Pakistan was about 29million tons of coal equivalent (TCE).? This corresponds to a per capita consumption ofabout 0.32 TCE-a factor of 7 less than the world average and a factor of 20 less thanthe average for the industrialized countries. It is thus obvious that Pakistan will have toincrease the level of its energy consumption to meet its socio-economic development

programs in the coming decades. Table 1 shows the distribution of different energy sourcesin the primary commercial energy consumption mix in selected years between 1950 and1983.y3

Following the introduction of natural gas in the mid-1950s an aggressive policy wasadopted to substitute gas for oil. Thus, while total commercial energy consumptionincreased during 1960-80 by 7.7% per year, the corresponding growth rate for naturalgas consumption was 12.4% per year. During the last 3 yr, however, total commercial

tl TCE = 27.76 x lo6 Btu.1 ton = 1000 kg.

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1104 AHMAD MUMTAZ and ARSHAD M. KHAN

Table 1. Distribution of energy sources in the primary commercial energy consumption mix: Pakistan, 1950-84

Share of energy consumption mix ( )

Source of energy 1950-51 1960-61 1970-71 1980-81 1983-84

Coal 40.9(27.2)

Oil 58.1(51.5)

Gas 0.0Hydroelectric 1.0Nuclear 0.0

Total 100.0(78.7)

22.6 9.3(11.0) (1.0)

53.6 42.5(44.5) (36.5)

18.6 35.55.2 12.70.0 0.0

100.0(55.5)

100.0(37.5)

6.3 6.6(1.4) (2.1)33.6 36.3

(30.5) (33.0)43.5 38.616.3 18.00.3 0.5

100.0(31.9)

100.0(35.1)

Figures in parentheses represent shares of imported fuels.

energy consumption has increased at a rate of 9.2% per year, but gas supply has increasedby only 4.7% yearly. As a result the share of natural gas in total energy consumption,which had reached a level of 44% in 1980-81, has now declined to about 39%. Duringthe last 5 yr the limited supply of gas has necessitated the conversion of many industriesto alternate fuels and increasing reliance on oil for thermal power generation.

Table 2. Historical pattern of electricity generation by source: Pakistan, 1950-84

Electricity generation ( shares)

Source of energy 1950-51 1955-56 1960-61 1965-66 1970-71 1975-76 1980-81 1983-84

Hydroelectric 28.4 57.6 49.1 38.5 47.9 52.7 56.3 58.6Oil 71.6 42.4 9.7 5.4 2.9 4.8 3.5 13.1Gas 0.0 0.0 40.6 51.3 46.4 36.0 39.0 26.6Coal 0.0 0.0 0.0 4.8 2.8 0.6 0.3 0.2Nuclear 0.0 0.0 0.0 0.0 0.0 5.9 0.9 1.5

Despite the slow expansion in the natural gas supply, gas consumption in the domesticsector has been increasing over the past 5 yr at about 22% per year. This has been due to

a deliberate policy to reduce the consumption of kerosene oil. It is not possible, however,to continue this policy due to supply limitations. Further, in order to suppress demandfor gas in all sectors, gas prices, which have already been increased several times over thelast 7 yr, are now planned to be increased gradually to a level of about two-thirds of theprice of furnace oil on a heat-content equivalent basis.

As seen in Table 1 the share of imported energy in the total commercial energy supplydeclined from about 80% in 1950-51 to 32% in 1980-81. Due to increasing reliance onoil it has again started increasing and now amounts to about 35%. Mainly as a result ofincreased oil prices, the countrys oil import bill, which was equivalent to about 8% of theexport earnings during 1972-73, corresponds to more than 50% of the export earnings

since 1980-81. This is causing a serious strain on Pakistans economy and calls for greateremphasis on the development and use of indigenous coal resources along with increasedpetroleum exploration.

FOSSIL FUEL RESERVES AND PROSPECTS FOR PRODUCTION

Pakistans proven recoverable fossil fuel reserves presently amount to 407 million TCEof gas, 51 million TCE of oil, and 57 million TCE of coal. In addition, there are about458 million TCE of identified recoverable coal reserves in the indicated and inferredcategories.3*4 During 1983-84 the levels of production of fossil fuels in Pakistan were: gas,


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Prospects for coal gasification in Pakistan 1105

11.3 million TCE; oil, 1.0 million TCE; and coal, 1.3 million TCE. Proven reserves-to-production ratios were: gas, 36; oil, 51; and coal, 44.

The natural gas supply from the countrys largest gas field at Sui is approaching its

technical limits, while production from two small fields at Sari and Hundi is alreadydeclining. To prevent gas supplies from falling below the current production level of about950 million cubic feet per day (MMCFD), a new gasfield at Pirkoh has recently beenbrought into production. When fully developed this field will have a production capacityof 120 MMCFD. It is estimated that, even with the full development of Pirkoh and othersmall fields, gas production will level off at about 1200 MMCFD in a few years.5 Furtherincreases in the supply of gas will not be possible until new reserves are discovered andput into production.

Some new oilfields have been discovered during the last few years and oil productionhas increased from a level of about 13,000 barrels per day (bod) in January 1984 to about28,000 in January 1985. Although these new discoveries are an encouraging development,due to the small size of the countrys oil reserves, production from hitherto discoveredfields can still not be increased in a sustainable way to much above 30,000 bod (2.2 millionTCE/yr).

It is estimated that even with the existing coal production capacity the supply of coalmay be doubled if sufficient demand exists. If all the known reserves of coal were to beconfirmed as economically viable and developed for mining, coal production could possiblybe increased to more than 10 million TCE/yr in 8-10 yr. However, before such largeincreases in coal production can be anticipated, it will be necessary to solve the technicalproblems associated with the use of Pakistans poor quality coal.

EXISTING COAL PRODUCTION AND USE PATTERNS

Information about the major coalfields of Pakistan is given in Table 33 and Fig. 1.Production from these fields has recorded an average annual growth of 3.7% from 1971-72 to 1983-84. Total domestic production during 1983-84 was 1.87 million tons (1.26million TCE).?

The biggest user of domestic coal is currently the brick kiln industry, which accountsfor about 95% of total consumption. Only 20,000-30,000 tons of coal are used annuallyin a power plant of 12-MW capacity at Quetta, while the household and service sectorsaccount for not more than an additional 30,000-40,000 tons/yr. The requirements of coalfor use in power generation and by households and the commercial sector have remainedpractically static over the last few years3

Requirements of the small foundries and of the Pakistan Steel Mill (located in Karachi)for coking coal are met through imports that amounted to 0.6 million tons in 1983-84.The steel mill is expected to go into full production by the end of 1985 when its cokingcoal requirements will reach a yearly level of 1.3 million tons. A coal washing plant of 250tons/day capacity that recently started operation at Sharigh will meet about 6% of thecoking coal requirements of the steel mill at Karachi.

PROSPECTS FOR INCREASED COAL USE

Coals found in Sind are lignite in rank; those in Baluchistan and Punjab are sub-bituminous. Coal quality in Pakistan is generally poor-high in both ash and sulfurcontent (Table 4).4 Such poor quality coals are not suitable for use in most industry.

A study was recently undertaken to identify the potential for coal substitution in existingindustries that consume more than 1 million CFT/day of gas or more than 9000 tons/yr

Average heating value of Pakistani coals = 18.74 million Btu/ton.


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1108 AHMAD MUMTAZ and ARSHAD M KHAN

The Lurgi dry-ash process

The only commercially available technology at present for SNG production is that basedon the Lurgi dry-ash process. The typical coal input capacity of a single Lurgi gasifier is

about 1200 tons/day.6 The SNG output of the plant depends upon the calorific value ofthe coal feed-about 20 MMCFD for hard coal and only about 12 MMCFD for low-grade coal of about 17 million Btu/ton. Taking the operating life of a plant as 20 yr, thelifetime coal requirements of a single gasifier plant at 85% capacity will be about 7.5million tons. Although at present only two fields have large enough proven reserves (seeTable 3) to support the lifetime operation of such a plant, at least eight additional fieldshave sufficient coal in the indicated and inferred categories to make them potentialcandidates for coal gasification in the medium to long term.

A Lurgi plant works on sized coal. With lignites that are very friable, the choice is eitherto use the unsuitable fines in some near by pulverized-coal-fired power plant (as is plannedat the Great Plains Gasification Associates plant in North Dakota, U.S.A.) or to convertcoal into briquettes before use (as is being practised in East Germany). The coal-firedpower plant at the Lakhra lignite field that is planned for completion by the early 1990scan readily utilize fines. It is hoped that gasifiers capable of accepting a large fraction offines will be available for future plants.

Economics of SNG producti on and supply

The presently available Lurgi gasifiers for SNG production have an overall efficiency of65%-about 54% for SNG and 11% for tar and phenol by-products. The specific capitalcost of a Lurgi dry-ash gasifier is SOO/(TCE/yr) or 18.0/(106 Btu/yr) of SNG outputcapacity (in 1984 US).4,6,7 The typical breakdown of the capital costs is given in Table5.6 The construction of such a plant is expected to take 3-4 yr.

Table 5. Cost breakdown of the Lurgi process

Activity/component % of cost

Coal preparation 4Gasification 18Oxygen plant 19Shift, purification, and sulfur removal 25Methanation and compression 12Utilities and general facilities 22

A number of new gasifiers are under development to operate on the slagging instead ofthe dry-ash process. It is hoped that these plants will be able to handle a wider variety ofcoals and have higher conversion efficiency and lower specific capital costs. A reductionof 20-30% in capital investment is expected along with about 5% improvement in overallefficiency by the year 2000. 6,7 A typical advanced SNG plant is assumed here to have anoverall efficiency of 65%, to produce no by-products, and to have a specific capital cost(in 1984 US) of 333/(TCE/yr) or 12.0/(106 Btu/yr).

Assuming average annual operation at 85% capacity, a 12% discount rate, and annualoperating and maintenance charges equivalent to 7% of capital costs, the SNG productioncosts for a present generation Lurgi plant and a typical advanced plant for variouscoal supply costs are given in Table 6. For the Lurgi plant an allowance of 1.0/106 Btuof SNG output has been allowed for the value of the by-product. Thus, the cost of SNGproduction by a mine-mouth gasification plant is in the range of 5.4-6.6/106 Btu for apresent generation Lurgi plant and 4.6-5.6/106 Btu for a typical advanced plant.The typical coal production costs in terms of 1984 US ( 1 = 14.0 Rupees) for variouscoalfields/regions are given in Table 7.

The transportation of SNG from a single gasifier Lurgi plant will require a pipeline of


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Prospects for coal gasification in Pakistan

Table 6. SNG production costs for a present generation Lurgi plant and a typical advanced plantfor various coal supply costs

Coal supply cost( /TCE)

SNG production costs ( /IO6 Btu)

Lurgi plant Typical advanced plant

20 4.65 3.9930 5.32 4.5440 5.99 5.1050 6.66 5.65

Table 7. Typical production costs for selected coalfields in Pakistan (1984 SUS)

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Production cost

CoalfieldJregion Typical heat value (million Btu/ton)

Baluchistan coals 22Makawal collieries 22Salt Range coals 18Sind coals 16

/Ton %/TCE

39 4939 4925 3918 31

about 6-8 in. diameter for gas transmission under medium pressure (about 1000 psi).Information on natural gas transportation costs is given in Table 8.8*g Based on thisinformation it is estimated that the SNG transportation cost in Pakistan per 100 km willbe approximately 200-3OO/million ft3 or 0.23-0.34/million Btu. It is taken here as

typically 250/million ft3 per 100 km or 0.28/million Btu per 100 km. It is further assumedthat new pipelines will have to be laid to take SNG only to the nearest natural gas pipelinewhere it will be injected into the system and that no additional cost will be needed totransport the SNG beyond such injection points. Keeping in view the relative location ofvarious coalfields and the existing natural gas pipelines (see Fig. l), the typical length of aconnecting SNG only pipeline is taken here as 100 km.

Table 8. Gas transportation costs in Pakistan: data from two recently completed projects

Project

Gastransportation

Pipe Capital cost costdiameter Capacity Length (million, ( /million(inches) (MMCFD) (km) W.S., 1984) cft/lOO km)

Quetta natural gas pipeline 12.0 45.0 344.0 59.4 244.0Pirkoh-Sui integration 18.0 120.0 70.0 37.7b 288.0

Assuming that the annual fixed charge for recovering the capital cost is 15% and that the annual O&M costis equivalent to one-fourth of the capital fixed charge and the pipeline is operated at 80% capacity.

bIncludes cost of compression station.

Figure 2 shows the variation in the delivered costs of SNG as a function of coal

production costs for both the present and the future coal gasification technologies. Onthe basis of present coal production costs in Pakistan the delivered costs of SNG will beapproximately 5.7-6.9/106 Btu for the present technology but may come down to 4.9-5.9/106 Btu if the advanced technologies come up to current expectations. The currentprices of different fuels are given in Table 9.3

With the present international price of crude oil at 28/bbl (S4.85/106 Btu) and that ofimported furnace oil and kerosene at 185/tori (S4.54/106 Btu) and 270/tori ( 6.25/106 Btu)respectively,3 the consumer prices of furnace oil and kerosene are rather low due togovernment subsidies. The natural gas prices in the country have been very low all along.Initially they were kept low in order to promote the use of gas by the industries in


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Prospects for coal gasification in Pakistan 1111

CONCLUDING REMARKS

Coal gasification is an economically viable energy option for Pakistan in the comingdecades. The total known recoverable coal reserves of the country (proven + indicated + in-

ferred) are 515 million TCE. If 30-50% of these are proven, developed, and dedicatedsolely to power generation (plant-life 30 yr) and coal gasification (plant life 20 yr), they maysupply 3-6 million TCE/yr of SNG in addition to fueling lOOO-MW coal-fired powerplants (at 70% capacity factor). With the expected demand of fossil fuels for thermalprocesses (other than for power generation) in the year 2000 being about 29 million TCE/yrand that of electricity being about 8000 MWYr, the coal resources of the country canbe developed to meet IO-20% of the former and 9% of the latter demand. The coalgasification option therefore needs to be kept under constant review in Pakistan so thatthe country may take full advantage of this option in the light of new technologicaldevelopments and possible future increases in the price of oil.

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REFERENCES

Briefing Services, Government and Public Affairs Department, United Kingdom, BP Statistical Review ofWorld Energy, British Petroleum Company, London (1984).A. M. Khan, S. B. Khan, A. I. Jalal and A. Mumtaz, Planning for Energy in Pakistan, In Renew abl e EnergySources: International Progress Part B, p. 409, Elsevier, Amsterdam (1984).Energy Year Book 1984 Directorate General of Energy Resources, Ministry of Petroleum and NaturalResources, Islamabad (1985).Chemical Consultants (Pakistan), Limited, Feasibility Study on the Utilization of Coal in Substitution ofOther Fuels, Final draft report, Vols. 1 and 2, for the Ministry of Petroleum and Natural Resources, Lahore(1984).A. I. Jalal, S. B. Khan and A. M. Khan, Development of the Electric Power Sector in Pakistan: Options and

Constraints. Paper presented at the APESC VI Workshop on the Future of Electric Power Sector in Asia-Pacific Region, East-West Center, Honolulu (1983).L. Grainger and J. Gibson, Coal Utilization: Technology, Economi cs and Poli cy Graham & Trotman, London(1981).Ch. Manthey, (ed.) Energy Technology D ata Handbook Vol. 1, Conversion Technologies, IEA Energy SystemsAnalysis Project, Applied Systems Analysis no. 18, KFA Julich GmbH, Julich (1980).Progress (a monthly publication of Pakistan Petroleum) 28, 3 (1984).Report of the Working Group on Development and Conservation of Energy Resources, Planning Commissionof Pakistan, Islamabad (1983).

energy volume 11 issue 11-12 1986 [doi 10.1016_0360-5442(86)90047-2] ahmad mumtaz; arshad m. khan --...

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