In December 2017, Air Products signed an agreement with a subsidiary of Shanxi Jincheng Anthracite Coal Mining Group, China’s leading coal mining conglomerate, for the supply of industrial gases to Phase One of Shanxi Jinmei Huayu Coal Chemical Co Ltd.’s (Jinmei Huayu’s) coal-to-clean-fuels project in Jincheng City, Shanxi Province.

Previously, Air Products signed a sale of equipment agreement with Jinmei Huayu to supply two air separation units (ASUs)—with a total capacity of more than 4,000 tons per day—for this project, which uses coal to produce clean fuels.

Air Products intends to buy back the two ASUs for approximately $100 million and supply industrial gases via pipelines to Jinmei Huayu under a long-term supply agreement, subject to finalization of a buy-back agreement and any government and regulatory approvals. The ASUs are expected to be onstream in mid-2018.

This agreement follows Air Products’ recent major investments with Lu’An in Changzhi, Shanxi Province and Yankuang in Yulin, Shaanxi Province to support China’s ongoing transformation and upgrade of its coal chemical industry that targets products with higher added-value and sustainability.

Shell has been at the forefront of gasification innovation over the past 50 years. The Shell Coal Gasification Process (SCGP) converts a wide range of coal to syngas that can be used:

• To generate power through the integrated gasification combined cycle (IGCC) with lower emissions than from burning coal or even natural gas, and a concentrated carbon dioxide stream for optional CCS;

• As an alternative feedstock for chemical manufacture;

• To produce high-value synthetic liquid fuels and lubricants; and

• To produce hydrogen via water–gas shift.

Shell’s coal gasification technology is available in two line-ups designed to meet different user business objectives:

• The SCGP syngas cooler line-up offers high thermal efficiency and is especially suitable for large projects and IGCC power generation.

• The bottom water-quench line-up uses the same mature reactor membrane wall/burner technology but with a simplified syngas cooler configuration that reduces capital costs by up to 30% and increases feedstock flexibility.

SCGP technology can process a wide range of coals, from lignite to anthracite, and including petcoke and biomass blends. It features low coal consumption (510–615 kg per 1,000 Nm³ of effective syngas); low oxygen consumption (310–350 Nm³ oxygen per 1,000 Nm³ of effective syngas); low freshwater consumption; and high throughput and availability with low maintenance costs by using proven reactor membrane wall and burner technology.

Broadly, gasification technologies offer a way to take varied lower-value feedstocks and convert them in a lower-emission manner into syngas. Air Products will then provide this syngas to customers to make higher-value products.

The acquisition of Shell’s technology, already in operation at more than 20 coal gasification plants, gives us access and opportunities to fully explore outsourcing options to produce and supply syngas for customers planning to use gasification.

—Seifi Ghasemi, chairman, president and CEO at Air Products

Ghasemi emphasized this acquisition supports Air Products’ continued focus on providing a full scope of industrial gases, rather than a strategic shift into technology licensing.

In addition, the two companies also have formed a strategic alliance in Liquids Gasification to provide a range of solutions to the market, including engineering, procurement and construction activities and plant operations, as well as technology licensing.

Ghasemi said Air Products looks forward to an important role as a project operating partner for the supply of industrial gases in the strategic alliance and leveraging Shell’s technology lead in the liquids gasification area, as demonstrated at the world-scale Jazan combined Gasification/Refinery project in Jazan Economic City, Saudi Arabia.