OGJ Online

Nov. 17, 2000—Seeking to diversify fuel serving its merchant power plants, TECO Power Services Corp. is planning to build a syngas-fired combined cycle power plant at CITGO Petroleum Corp.’s Lake Charles, La., refinery.

TECO is in preliminary discussions with CITGO to construct a 840 MW power plant that will produce power for the grid, steam and hydrogen for the refinery, and use petroleum coke as the syngas fuel feedstock. The plant, apparently the first US merchant power plant to use syngas, is planned to be in operation by 2005.

If the agreement is finalized, the plant will cost $1.2 billion or about $1,790/kW net, compared to about $1,200/kW for a new coal plant. Compared to coal, the gasification plants don’t have environmental drawbacks, including air pollution problems, waste disposal, and transportation headaches.

TECO will sell half of its 570 MW of power produced by the power plant on the market and seek long term contracts for the rest, says Laura Plum, spokesperson for TECO. The balance of the electricity produced by the plant powers the gasification unit and produces steam and hydrogen used by the refinery.

TECO Power will keep a 50% stake in the plant and is seeking a partner for the rest of the equity, says Plum. As owner of the technology, Texaco Inc. has the first right of refusal, according to a memorandum of understanding among the parties.

Under the agreement, the manufacturing complex will supply the power plant with 5,000 tons/day of petroleum coke and excess refinery fuel gas as feedstock. Besides selling electricity to the grid, the plant will also provide the refinery with hydrogen and steam for its refinery purposes.

“There is still lots of work to be done before we can put this project before our board of directors,” says Andy Norman, a Texaco spokesman.

Texaco developed and owns the technology used by plants generating 5,200 MW of power worldwide. In the US, there are a handful of other small cogeneration plants using the gasification technology to produce power and steam for its host. But not more than 35 MW of power produced by these plants are sold on the grid, according to Texaco documents.

TECO’s utility, Tampa Electric Co., has one such plant the Polk power station, which became operational in 1996. But no other large merchant plants use the technology, says Plum.

The technology is not economic when gas sells in the $2-$2.50/Mcf, according to Texaco sources. But with gas priced above $3/ Mcf, the technology becomes competitive.

“These current and forecast prices for natural gas makes the economics of the gasification technology really attractive,” says Norman. “The technology can also alter the economics of a refinery because coke is a pretty useless product.”

The technology produces hydrogen and sulfur as byproducts. These have some economic value for the refinery owner. The process begins with a low-value hydrocarbon product such as coke. The feed is injected into the gasifier with oxygen to make the syngas which is then cooled.

The cooled syngas contains carbon dioxide (CO2) and hydrogen sulfide which is processed to remove the elemental sulfur, CO2, and hydrogen, according to Texaco documents. After drying, the syngas is ready to be use as an energy source.