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Conference brings Mongolia closer to clean coal

5th of 9, 2014


B.Tugsbilegt, E.Odjargal

With prices falling globally and demand in China declining, coal miners in the country have had a rough time in recent years but even then, there is no argument about the continued importance of coal in the economy of Mongolia, and of its primacy as an export item. This fact was recently underscored, giving the coal sector a much needed morale booster, when the World Clean Coal Conference was held on May 28-29 in Ulaanbaatar, the first time the Shanghai-based World Clean Coal Conference International organised the event in Mongolia.The choice of venue is always in recognition of the host country’s status as a significant repository of coal resources and of its capacity and willingness to introduce new technologies in coal extraction and processing.

The theme of the Ulaanbaatar conference was “Open up Clean Coal Opportunities in Mongolia”, a timely reminder that a commodities export-oriented country like ours has to change existing practices to meet anti-pollution norms to mitigate the destructive effects of climate change and greenhouse gas emission. Most of Mongolia’s massive coal reserves, among the 10 largest in the world, is brown coal, but now we wish to go for CTL, CTG, UCG. The traditionally “dirty” source of energy must wear a fresh and “clean” look for the sake of the planet’s future.

The conference brought together some 140 delegates from 40 companies in several countries.These included such major players in the clean coal sector as Peabody Energy, Changzheng Engineering, Air Liquide, ThyssenKrupp, China Huanqiu Contracting & Engineering Corp, Posco, Linde AG, Hatch, and Siemens. Their presentations described a variety of coal gasification and liquefaction technologies that would boost the Mongolian potential to produce clean coal. Presentations also came from major domestic miners such as MAK, Baganuur Energy Corp (BECo), which is MCS-Posco JV.

MAK’s Aduunchuluun CTL project, in Bayantumen in Dornod aimag, will be completed in 2019 and will annually produce 400,000 tons of gasoline, 17,000 tons of LPG, and 23,000 tons of sulfur from 3.4 million tons of coal. It will have a 150-MW power plant, with potential to expand its capacity by another 150 MW. The project capex is $2.7 billion.The estimated reserve in Aduunchuluun brown coal deposit is 467.4 million tons under Australian JORC standard.

The Baganuur Energy project, with a $2-billion investment, is expected to be operational in 2018 with capacity to produce 450,000 tons of diesel and 100,000 tons of dimethyl ether per year. The feasibility study for the project has been prepared by Hatch and was approved by the Ministry of Mining in July, 2013. The environment impact assessment for the project was completed in 2013. In-Hwa Chang, Executive Vice President of Posco & Board Member, BECo revealed that they would soon announce details of the kind of technology planned to be used at the Baganuur Energy plant.

Asgad Energy LLC,  established by Ascot Energy of Singapore and Hulaan Coal, a Canadian company -- plans to carry out underground coal gasification (UCG) based on three coal deposits (Sharyn Gol, Shivee Ovoo,  and Tevshiin Gobi) of Hulaan Coal. Its Director, Kev Garner, gave a presentation on alternative clean energy sources in Mongolia through UCG.


In his inaugural address, Parliament Speaker Z. Enkhbold noted how the conference presented Mongolian policy makers and miners with the opportunity “to learn from the experience of countries advanced in the use of clean coal technologies”and to discuss collaboration with them. He assured the meeting that the Mongolian Parliament and Government would be supporting developments in this area with “stable policy, positive legal and investment environment, and an encouraging tax regime”.





Deputy Minister of Mining O.Erdenebulgan explained the Government’s policy on the issue and described how the Ministry was cooperating with companies working on clean coal projects, and interacting with leading producers of technologies in this area, international banking and investment firms in the field of development of clean coal sector, including coal gasification, liquefaction, oil shale, and coal bed methane projects. “We must expedite exploration and extraction of resources and produce clean energy by using the right technology, and shall keep supporting the concerned companies continuously,”he said.

His speech made a special mention of the MoU signed last October between Sinopec and the Ministry of Mining for setting up a coal gasification plant. The pre-feasibility study is expected to be ready in August. The project will require an investment of $30 billion, and its four units will have a combined annual capacity to produce 15 billion cubic metres of gas from 50 million-80 million tons coal.

The German firm Thyssenkrupp has already offered to build a factory in Mongolia to produce 880,000 tons of petroleum and 84,000 tons of gas per year, based on indirect gasification technology. Claudio Marsico, Sales Director of the Gas Technologies division of ThyssenKrupp Uhde, told MMJ at the sidelines of the conference that they are awaiting the Mongolian Government’s decision.

CECO or Changzheng Engineering is well-known in the field of coal gasification. It is reviewing aspects of setting up a plant in Mongolia but nothing concrete has been decided as yet, according to Congbin Jiang, a company delegate at the conference.

A heartening feature of the conference was how those representing companies producing clean coal technology were positive about possibilities and prospects in Mongolia. MMJ met some of them and asked them questions on related issues. Selected parts of the conversations appear below.

“There is tremendous opportunity for clean coal in Mongolia”
(Interview with Christopher J. Hagedorn, Group Executive and Chief Development Officer, Peabody Energy.)


How do you see clean coal development opportunities in Mongolia?

There is tremendous opportunity for Mongolia, like in any place where there are not large existing investments. As the presentation you saw explained, new coal plants have to be built, new CTL and CTG plants have to be built and these will be equipped with the best commercially viable technology available today. I would argue that the opportunity is much greater here, for elsewhere, like in China or in the USA, you have existing infrastructure, but that makes it more costly as retrofitting equipment and technology needs more capital investment than, as here, where you can have brand new facilities, brand new plants that you can design with the best technologies in use now so that they can be world class from an emissions footprint standpoint and also from an efficiency standpoint. So, I actually like the opportunity here very very much.  

What about CCS development opportunities in Mongolia?
I am not an expert in geology, so I don’t have all the geological information about Mongolia that would determine these. I suspect that given the general geology, especially in places where coal is present in some of the formations, there are opportunities. I think it is a matter of commercialisation of CCS technology to bring the cost down. I would assume that the geological storage capability is present somewhere in the country. But I am not an expert on that.

“There are great opportunities here for clean coal technologies”
(Interview with Kerry J.McKenna, Practice Leader, Gasification and Coal-to-Liquids, Hatch)


What do you think of opportunities of clean coal development in Mongolia?

Mongolia has a great need for clean coal technologies for several reasons: Energy security is very important since coal is the country’s main locally available source of energy, and utilising the coal rather than importing other fuels such as oil, natural gas or power is definitely in the country’s best interest. Environmentally, the use of coal without adequate pollution control technologies has led to Ulaanbaatar having some of the worst air quality in the world. Economically the country has low cost supplies of coal that can be converted into higher value products offsetting the import of these products. The combination of needs as well as good market conditions within the country for the products that can be produced through clean coal technologies mean that there are great opportunities for these technologies to be implemented.

How do you feel about the first clean coal conference in Mongolia?
I was happy that Hatch participated in it. The conference was well attended and the presentations addressed the challenges and opportunities for clean coal technologies in the country. Overall, it was a well-run and useful conference.

You have already completed the feasibility study on the CTL project of the MCS-Posco JV. Mongolians worry about environmental issues, especially water. Could you give us some idea of a CTL plant’s water consumption needs to produce one ton fuel?
All large thermal processing plants like CTL facilities have significant cooling requirements. While a small proportion of the water is consumed in the CTL process, by far most of the water consumption is used for cooling. Depending on the cooling water strategies employed by the CTL project, the typical range of water consumption is between 4 and 10 tons of water per ton of product.  The BECo plant will utilise air-cooling, which reduces the water consumption to the lower end of that range. Additionally and depending on the properties of the coal, water may be extracted from coals such as lignite for use in the process. If you consider the water consumption relative to the coal consumption of the facility, it will be approximately one ton of water per ton of coal or less, which is much less than the water consumption that would be associated with a subcritical coal-fired power plant with evaporative cooling.

We completed our part of the feasibility study for the  BECo more than a year ago, and now additional Pre-Front End Engineering and Design (Pre-FEED) studies are being carried out by BECo. The next major phase of the project is FEED engineering, after FEED there will typically be one final gate before the final approval to proceed with construction.

How do you see Mongolian opportunities in the world fuel market?  I ask this because recent years have seen studies on several projects on CTL, coal gasification and also oil shale, but not much real progress as Mongolia’s domestic needs are too limited to justify the big investments, and both our neighbours are themselves big producers of fuel. Therefore, will having several projects be commercially viable, or should we go for just one or, at most, a few projects?

In our study Hatch focused on the technology and not the markets for CTL. These plants are very capital-intensive and will bring in significant foreign investment. But you must remember that there are always many challenges associated with making a final investment decision so not all of the currently proposed projects will take off. The BECo presentation at the conference projects that Mongolia would need seven processing plants to meet domestic diesel needs in 2020. In that case, several CTL projects could come up before Mongolia’s domestic needs are met. In their presentation, MAK indicated that they are considering international markets for the fuel that their project will produce. Once one or more of these projects have been completed successfully, it should position Mongolia as a world class technology leader in this field, making future projects easier to execute.

“We offer plants with the highest efficiency”
(Interview with Gerhard Beysel,Vice President, Business Development and Sales, Air Separation Plants, The Linde Group)


What do you think of opportunities of clean coal development in Mongolia?

The opportunities and sources are there and the wish of Mongolia to become independent from fuel imports is obvious.

How do you feel about the first clean coal conference in Mongolia?
I was impressed by the big interest shown and by the large number of participants.

Do you have any projects in Mongolia, where you collaborate?
Linde has been following CTL projects in Mongolia for about two years, and we have held talks exploring cooperation with MAK and MCS and with ThyssenKrupp Uhde on the ICM project.

What’s new in your company’s clean coal technology and projects and what comparative advantages does your technology offer?
As a technology leader, especially in Air Separation, we offer plants with the highest efficiency, making operation of CTL more economical and reliable.

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