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The chief executive of state-owned coal miner Solid Energy, Don Elder, used the 2010 Petroleum Conference in Auckland to push the company’s vast coal deposits as the answer to the nation’s energy future.
“That’s around $2 billion to $4 billion in new export revenue at today’s prices, or $5 billion to $10 billion at 2008 prices, which are likely to be back.” Solid Energy had secured reserves equivalent to 35,000PJs – equivalent to eight times the size of the global scale Maui gas field. Extraction of underground coal-seam gas was the next great energy source, he says. “It will be bigger than nuclear power, and we are positioning at the front of the energy curve.” Unconventional petroleum represented just three percent of the world market today, but it would have to increase by as much as 60 percent, since coal represented 80 percent of the world’s primary energy outside the Middle East, Elder adds. However, Solid Energy is still evaluating its technologies options to convert its Southland lignite reserves into high value products and hit a set-back recently when an agreement with innovative Australian company, Ignite Energy Resources (IER), fell-over. An initial deal secured exclusive Kiwi rights to IER’s technology to convert low energy feedstocks, such as lignite and biomass, to high-grade coal and synthetic crude oils which have the potential to be upgraded to transport fuel. IER is currently converting lignite to synthetic crude oil and high-grade coal at a pilot plant in Somersby, New South Wales, and the two companies were working together to construct and commission a pilot plant at an undetermined location in Southland. In a press release that came out just after the petroleum conference, Solid Energy said it had failed to conclude a final licence agreement with IER within an agreed time frame and had brought its existing agreement with the Aussie company to an end. “The companies will instead undertake a further stage of work to investigate the potential in New Zealand for using IER’s technology,” it said. Meantime, Solid Energy is making better progress with its proposed lignite-briquetting plant near Mataura – inaugurating the country’s first industry for the production of high-grade energy briquettes from low-grade coal. Solid Energy is also building a lignite-to-urea plant in Southland in association with Ravensdown, the largest supplier of fertiliser in New Zealand which already supplies more than half of all the fertiliser used in our agriculture. The briquette project, which will upgrade about 100,000 tonnes of lignite per annum mined at Solid Energy’s New Vale Opencast Mine near Mataura, is being developed in association with Solid Energy’s joint venture partner GTL Energy (GTLE) in the US, which commissioned its first commercial-scale lignite upgrading plant near South Heart, North Dakota this year. GTLE also successfully completed a bulk sample combustion trial of 420 tonnes of Solid Energy’s New Vale Mine lignite that was shipped from Bluff at the end of 2009 for testing. Solid Energy’s general manager new energy Brett Gamble says the trial results boded well for Solid Energy’s proposed pilot briquetting plant in Southland. “GTLE reduced the moisture of the New Zealand lignite by an average of approximately 65 percent, raising the energy content by about 50 percent, so it turns lignite into a product that is on a par with Ohai coal. The final test though is how well it performs in local conditions.” The trial batch was returned and distributed to Solid Energy’s commercial customers in New Zealand to test in their boilers, he says. The proposed Southland briquetting plant is the first of three Solid Energy lignite development projects planned for lignite resources based around the Waimumu, Croydon and Mataura areas of Southland. All these projects are expected to achieve full carbon compliance using a range of options to reduce CO2 emissions, including carbon capture and storage, bio sequestration and bio feedstock options. “We’re progressing all our Southland lignite projects in parallel as there are sufficient resources in Southland to accommodate our briquetting plant, coal to fertiliser project, lignite to transport fuel project and many others besides,” says Gamble. “The key to the success of all of these is to find the technologies which can best be applied in New Zealand.”
Energy NZ Vol.4 No.6 November-December 2010 |
Solid Energy’s coal mining activities are already extracting about 120 Petajoules of energy every year and the company has aggressive plans to more than double that within a decade, Solid Energy chief Don Elder said at the 2010 Petroleum conference.