EnergyVol. 11, No. 11/12, pp.

1103-1111, 1986

Printed in Great Britain

0360-5442/86 $3.00 +O.OO Pergamon Journals Ltd

PROSPECTS

FOR COAL GASIFICATION

AHMAD MUMTAZ

IN PAKISTAN

and ARSHAD

M.

KHAN

P. 0. Box 1114, Islamabad,

Pakistan

Abstract-Pakistan is currently facing serious energy supply problems. Energy demand has been increasing by about 8% per year during the last 12 yr and this trend is likely to continue. Since 1980-81 the oil import bill has been consuming more than 50% of yearly export earning. As there is 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 coal production costs, due to the low cost of indigenous gas and subsidized furnace oil and kerosene and the high SNG production costs from the technology available at present. If domestic prices of gas and liquid fuels are increased to the level of current international oil prices and developments in coal gasification technologies can bring about expected reductions in capital costs and improvements in efficiency, coal gasification may become economical in Pakistan. It is estimated that indigenous coal resources can potentially supply 3-6 million TCE/yr of SNG by 2OOC-about lo-20% of the substitutable fossil fuels demand for that year-along with meeting about 9% of the electricity demand.

INTRODUCTION

Pakistan is currently facing serious energy supply problems. About 90% of its oil requirements must be met through imports, which have consumed more than 50% of the national export earnings during the last few years. Natural gas production from existing fields is approaching its technical limits. Due to inadequate availability of gas many industries have been asked to switch to alternate fuels. At the same time the share of oil in thermal generation has increased from about 1% in 1978-79 to about 33% in 198384. Still the country is experiencing acute shortages of power that result in frequent load sheddings. As most of the easily exploitable hydroelectric power has already been developed, further developments will be expensive and will require large extensions in the transmission network. Domestic coal is poor in quality and not suitable for most industrial applications or household uses. In contrast to this supply situation, energy demand has been increasing very rapidly. Commercial energy demand has increased by about 8% per year for the last 12 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 excessive dependence on imported energy. This paper will examine the prospects for coal gasification in Pakistan in the medium and long terms.

PATTERNS

OF

ENERGY

CONSUMPTION

During 1983-84 primary commercial energy consumption in Pakistan was about 29 million tons of coal equivalent (TCE).? This corresponds to a per capita consumption of about 0.32 TCE-a factor of 7 less than the world average and a factor of 20 less than the average for the industrialized countries. It is thus obvious that Pakistan will have to increase 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 sources in the primary commercial energy consumption mix in selected years between 1950 and 1983.y3 Following the introduction of natural gas in the mid-1950s an aggressive policy was adopted to substitute gas for oil. Thus, while total commercial energy consumption increased during 1960-80 by 7.7% per year, the corresponding growth rate for natural gas 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. 1103

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 Coal Oil Gas Hydroelectric Nuclear Total

1950-51 40.9 (27.2) 58.1 (51.5) 0.0 1.0 0.0 100.0 (78.7)

1960-61 22.6 (11.0) 53.6 (44.5) 18.6 5.2 0.0 100.0 (55.5)

1970-71 9.3 (1.0) 42.5 (36.5) 35.5 12.7 0.0 100.0 (37.5)

1980-81 6.3 (1.4) 33.6 (30.5) 43.5 16.3 0.3 100.0 (31.9)

1983-84 6.6 (2.1) 36.3 (33.0) 38.6 18.0 0.5 100.0 (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 increased by 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%. During the last 5 yr the limited supply of gas has necessitated the conversion of many industries to 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 Hydroelectric Oil Gas Coal Nuclear 1950-51 28.4 71.6 0.0 0.0 0.0 1955-56 57.6 42.4 0.0 0.0 0.0 1960-61 49.1 9.7 40.6 0.0 0.0 1965-66 38.5 5.4 51.3 4.8 0.0 1970-71 47.9 2.9 46.4 2.8 0.0 1975-76 52.7 4.8 36.0 0.6 5.9 1980-81 56.3 3.5 39.0 0.3 0.9 1983-84 58.6 13.1 26.6 0.2 1.5

Despite the slow expansion in the natural gas supply, gas consumption in the domestic sector 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 demand for gas in all sectors, gas prices, which have already been increased several times over the last 7 yr, are now planned to be increased gradually to a level of about two-thirds of the price of furnace oil on a heat-content equivalent basis. As seen in Table 1 the share of imported energy in the total commercial energy supply declined from about 80% in 1950-51 to 32% in 1980-81. Due to increasing reliance on oil it has again started increasing and now amounts to about 35%. Mainly as a result of increased oil prices, the countrys oil import bill, which was equivalent to about 8% of the export 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 greater emphasis on the development and use of indigenous coal resources along with increased petroleum exploration.

FOSSIL

FUEL

RESERVES

AND

PROSPECTS

FOR

PRODUCTION

Pakistans proven recoverable fossil fuel reserves presently amount to 407 million TCE of gas, 51 million TCE of oil, and 57 million TCE of coal. In addition, there are about 458 million TCE of identified recoverable coal reserves in the indicated and inferred categories.3*4 During 1983-84 the levels of production of fossil fuels in Pakistan were: gas,

Prospects for coal gasification in Pakistan

1105

11.3 million TCE; oil, 1.0 million TCE; and coal, 1.3 million TCE. Proven reserves-toproduction 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 already declining. To prevent gas supplies from falling below the current production level of about 950 million cubic feet per day (MMCFD), a new gasfield at Pirkoh has recently been brought into production. When fully developed this field will have a production capacity of 120 MMCFD. It is estimated that, even with the full development of Pirkoh and other small fields, gas production will level off at about 1200 MMCFD in a few years.5 Further increases in the supply of gas will not be possible until new reserves are discovered and put into production. Some new oilfields have been discovered during the last few years and oil production has increased from a level of about 13,000 barrels per day (bod) in January 1984 to about 28,000 in January 1985. Although these new discoveries are an encouraging development, due to the small size of the countrys oil reserves, production from hitherto discovered fields can still not be increased in a sustainable way to much above 30,000 bod (2.2 million TCE/yr). It is estimated that even with the existing coal production capacity the supply of coal may be doubled if sufficient demand exists. If all the known reserves of coal were to be confirmed as economically viable and developed for mining, coal production could possibly be increased to more than 10 million TCE/yr in 8-10 yr. However, before such large increases in coal production can be anticipated, it will be necessary to solve the technical problems 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 197172 to 1983-84. Total domestic production during 1983-84 was 1.87 million tons (1.26 million TCE).? The biggest user of domestic coal is currently the brick kiln industry, which accounts for about 95% of total consumption. Only 20,000-30,000 tons of coal are used annually in a power plant of 12-MW capacity at Quetta, while the household and service sectors account for not more than an additional 30,000-40,000 tons/yr. The requirements of coal for use in power generation and by households and the commercial sector have remained practically 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 coking coal requirements will reach a yearly level of 1.3 million tons. A coal washing plant of 250 tons/day capacity that recently started operation at Sharigh will meet about 6% of the coking 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 subbituminous. Coal quality in Pakistan is generally poor-high in both ash and sulfur content (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 existing industries 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.

1106

AHMAD MUMTAZ and ARSHAD M. KHAN Table 3. Identified recoverable coal reserves in Pakistan Coal reserves (million tons)

Major

coalfields

Proven

Indicated

Inferred

Total

Punjab/NWFP Makarwal Gullakhel Eastern and Central Western Salt Range Misc. Cherat

7.0 Salt Range 40.0

7.0 2.6 13.0 0.36 0.04

17.0 2.6 57.0 0.36 0.04 28.5 28.0 13.5 9.0 4.5 8.6 6.0 498.0 40.0 50.0 763.1

Baluchistan Sor Range-Sinjidi-Deghari Khost-Sharigh Nakus-Harnai Mach Abegum Pir Ismail Ziarat Duki Chamalang Sind. Lakhra Jhimpir-Meting Sonda Total

7.6 0.3 0.5 0.1 0.1 0.1

20.9 8.3 5.5 2.4 1.7 2.0

19.4 7.5 6.5 2.7 6.5 6.0 392.0 25.0 40.0 528.6

62.0 5.0 2.0 84.7

44.0

10.0 8.0 149.8

Makarwal Range

Gullakhel

2. Salt 3
&. Sor

Range - Sinjidi

- Deghari

Khost -Sharigh Nakus - Harnai Mach - Abegum Duki Lukhra Jhimplr-Meting Sonda

5 6 7 8 9

li

&WFP ,:

\ . .
IRAN / .

I
I_7 BALUCHISTAN
( -/ INDIA

SIND

.Y
\

GAS PIPELIIIE COAL FIELO

of major coalfields and natural gas transmission pipelines in Pakistan.

Fig. 1. Locations

Prospects

for coal gasification analysis Analysis Ash (W 20.8 32.0 7.1 8.1 17.6 17.4 31.2 21.5

in Pakistan coals

1107

Table 4. Representative Proximate Moisture (W 3.6 5.2 14.7 10.7 6.2 24.9 12.3 13.4 Volatile matter W) 37.6 31.8 36.4 38.1 33.4 30.3 34.0 30.3

of some Pakistani

Coal fields Makarwal Salt Range (Katha) Sor Range Pir Ismail Ziarat Duki Lakhra Jhimpir-Meting Sonda

Fixed carbon W) 38.0 31.0 41.8 43.1 42.9 27.5 22.5 26.7

Sulfur W) 6.1 5.6 5.0 4.1 6.0 4.2 na na

Calorific value (million Btu per ton) 22.2 17.7 21.9 23.1 22.1 15.6 15.7 na

of oi1.4 A number of industries, including cement plants, sugar mills, fertilizer plants, textile mills, and chemical plants, were surveyed. It was concluded that cement plants can be economically retrofitted to use domestic coal. Some of the wet process plants can use domestic coal as such but others will have to use domestic coal blended with imported low-sulfur coals or furnace oil. A case-by-case study of the dry process plants will be required to identify those that can use domestic coal as such and those for which technical problems will have to be solved before they can use domestic or blended coal. The estimated coal requirements of both types of cement plants that can be converted to coal will be about 1.3 million tons/yr of domestic coal. The sugar industries can also be converted to use domestic coal. If the nine sugar plants currently using natural gas are converted to coal, total coal requirements will be about 0.4-0.5 million tons/yr. The existing boilers of the remaining industries can use coal only in the form of coal-liquid mixtures (CLMs) for which extensive beneficiation of domestic coal will be necessary to meet stringent ash- and sulfur-content requirements. Thus, only the cement and sugar industries appear promising for conversion to domestic coal. Large extensions are planned for the use of coal for power generation. A 300-MW coalfired power plant based on Lakhra coal is expected to go into operation by 1990. A total of lOOO-MW coal-fired power generation capacity is expected to be installed by the year 2000. If these plants materialize, coal demand in the power sector will increase to 4.0-5.0 million tonsfyr by the end of this century. To reduce consumption of fuel wood for household use, which is resulting in large-scale deforestation, smokeless coal briquettes will be introduced in the domestic sector. A feasibility study for setting up a coal briquette production plant is now under way.

COAL

GASIFICATION

Compared to oil and natural gas, coal is an inconvenient fuel to mine, handle, transport, and burn at the end-user level. It also causes relatively more environmental pollution. These disadvantages are magnified when the quality of the coal is poor as is the case with indigenous coal in Pakistan. The disadvantages can be overcome to a large extent, however, if the coal is converted to substitute natural gas (SNG), preferably in situ or at the mine mouth, and then transported through pipelines. As the coalfields in Pakistan have mostly thin seam-0.5-1.5 m thick lying at depths of 300-1000m-they are not quite amenable to underground coal gasification, which can be used economically only in seams that are several meters thick and relatively shallow. Further, since most of the fields are located about 100 km from the natural gas pipelines (see Fig. I), it will be more economical to gasify mined coal near the mines and to inject SNG into the gas pipelines rather than to gasify coal after transporting it to the demand centers.

1108

AHMAD MUMTAZ and ARSHAD M. KHAN

The Lurgi dry-ash process

The only commercially available technology at present for SNG production is that based on 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 of the coal feed-about 20 MMCFD for hard coal and only about 12 MMCFD for lowgrade coal of about 17 million Btu/ton. Taking the operating life of a plant as 20 yr, the lifetime coal requirements of a single gasifier plant at 85% capacity will be about 7.5 million tons. Although at present only two fields have large enough proven reserves (see Table 3) to support the lifetime operation of such a plant, at least eight additional fields have sufficient coal in the indicated and inferred categories to make them potential candidates 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 either to use the unsuitable fines in some near by pulverized-coal-fired power plant (as is planned at the Great Plains Gasification Associates plant in North Dakota, U.S.A.) or to convert coal into briquettes before use (as is being practised in East Germany). The coal-fired power plant at the Lakhra lignite field that is planned for completion by the early 1990s can readily utilize fines. It is hoped that gasifiers capable of accepting a large fraction of fines will be available for future plants.
Economics of SNG production and supply

The presently available Lurgi gasifiers for SNG production have an overall efficiency of 65%-about 54% for SNG and 11% for tar and phenol by-products. The specific capital cost of a Lurgi dry-ash gasifier is $SOO/(TCE/yr) or $18.0/(106 Btu/yr) of SNG output capacity (in 1984 $US).4,6,7 The typical breakdown of the capital costs is given in Table 5.6 The construction of such a plant is expected to take 3-4 yr.
Table 5. Cost breakdown Activity/component Coal preparation Gasification Oxygen plant Shift, purification, and sulfur removal Methanation and compression Utilities and general facilities of the Lurgi process % of cost 4 18 19 25 12 22

A number of new gasifiers are under development to operate on the slagging instead of the dry-ash process. It is hoped that these plants will be able to handle a wider variety of coals and have higher conversion efficiency and lower specific capital costs. A reduction of 20-30% in capital investment is expected along with about 5% improvement in overall efficiency by the year 2000. 6,7 A typical advanced SNG plant is assumed here to have an overall 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 annual operating and maintenance charges equivalent to 7% of capital costs, the SNG production Lurgi plant and a typical advanced plant for various costs for a present generation coal supply costs are given in Table 6. For the Lurgi plant an allowance of $1.0/106 Btu of SNG output has been allowed for the value of the by-product. Thus, the cost of SNG production by a mine-mouth gasification plant is in the range of $5.4-6.6/106 Btu for a present 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 various coalfields/regions are given in Table 7. The transportation of SNG from a single gasifier Lurgi plant will require a pipeline of

Prospects

for coal gasification

in Pakistan Lurgi plant and a typical advanced plant

1109

Table 6. SNG production costs for a present generation for various coal supply costs Coal supply cost ($/TCE) Lurgi plant 20 30 40 50 4.65 5.32 5.99 6.66

SNG production

costs ($/IO6 Btu) Typical advanced 3.99 4.54 5.10 5.65 plant

Table 7. Typical production

costs for selected coalfields

in Pakistan

(1984 SUS) Production cost %/TCE 49 49 39 31

CoalfieldJregion Baluchistan coals Makawal collieries Salt Range coals Sind coals

Typical heat value (million 22 22 18 16

Btu/ton)

$/Ton 39 39 25 18

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 this information it is estimated that the SNG transportation cost in Pakistan per 100 km will be 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 $0.28/million Btu per 100 km. It is further assumed that new pipelines will have to be laid to take SNG only to the nearest natural gas pipeline where it will be injected into the system and that no additional cost will be needed to transport the SNG beyond such injection points. Keeping in view the relative location of various coalfields and the existing natural gas pipelines (see Fig. l), the typical length of a connecting SNG only pipeline is taken here as 100 km.
Table 8. Gas transportation costs in Pakistan: data from two recently completed projects Gas transportation cost ($/million cft/lOO km) 244.0 288.0 cost

Project Quetta natural gas pipeline Pirkoh-Sui integration

Pipe diameter (inches) 12.0 18.0

Capacity (MMCFD) 45.0 120.0

Length (km) 344.0 70.0

Capital cost (million, W.S., 1984) 59.4 37.7b

Assuming that the annual fixed charge for recovering the capital cost is 15% and that the annual O&M is 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. On the basis of present coal production costs in Pakistan the delivered costs of SNG will be approximately $5.7-6.9/106 Btu for the present technology but may come down to $4.95.9/106 Btu if the advanced technologies come up to current expectations. The current prices 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 of imported 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 to government 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

1110

AHMADMUMTAZ and ARSHAD M. KHAN

20

25

30

35

55

COAL

SUPPLY

COST ($/TcE)

Fig. 2. Delivered cost of SNG vs coal supply cost for the presently available Lurgi process and a typical advanced process.

Table 9. Consumer prices of different fuels: in Pakistan, July 1984 Fuel Natural gas Domestic users Industrial users Commercial users Coal Liquid fuels Furnace oil Kerosene S/million Btu

1.31-1.97 1.82 2.47 1.5-3.1 (average 2.5) 3.01 5.88

preference over furnace oil. Now despite the fact that supplies of gas are running short, its price has not been increased quickly enough in view of various socio-economic and political considerations. Still it is hoped that within a few years gas prices will be brought at a level with the prices of furnace oil and kerosene while the subsidy on the latter two fuels may also be withdrawn. It is thus appropriate to consider the delivered cost of SNG by comparing it with the price of crude oil. At present SNG can compete with oil only if the production cost of coal in Pakistan is below $19/TCE, vs the present production costs of $31-49/TCE. Although the international oil market has been relatively soft for the last 3 yr, it is expected that this trend will soon reverse itself and that the price of oil will start increasing again in real terms due to growing depletion of the world oil reserves. A price level of $35/barrel (in terms of 1984 dollars) by the year 2000 is not ruled out in light of the experience over the past 12 yr. In such a situation coal gasification based on advanced technologies will be competitive with oil even at coal production costs of %SO/TCE. It is also hoped that with proper organization of the coal-mining industry in Pakistan and with the introduction of modern, more efficient mining technologies, coal production costs may come down below their present level. Thus, coal gasification is expected to be quite cost effective in the medium to long term, provided that efforts are directed toward upgrading the large coal reserves of the country lying in the indicated and inferred categories and toward modernizing the coal-mining industry.

Prospects

for coal gasification

in Pakistan

1111

CONCLUDING

REMARKS

Coal gasification is an economically viable energy option for Pakistan in the coming decades. The total known recoverable coal reserves of the country (proven + indicated + inferred) are 515 million TCE. If 30-50% of these are proven, developed, and dedicated solely to power generation (plant-life 30 yr) and coal gasification (plant life 20 yr), they may supply 3-6 million TCE/yr of SNG in addition to fueling lOOO-MW coal-fired power plants (at 70% capacity factor). With the expected demand of fossil fuels for thermal processes (other than for power generation) in the year 2000 being about 29 million TCE/yr and that of electricity being about 8000 MWYr, the coal resources of the country can be developed to meet IO-20% of the former and 9% of the latter demand. The coal gasification option therefore needs to be kept under constant review in Pakistan so that the country may take full advantage of this option in the light of new technological developments and possible future increases in the price of oil.

REFERENCES Briefing Services, Government and Public Affairs Department, United Kingdom, BP Statistical Review of World Energy, British Petroleum Company, London (1984). A. M. Khan, S. B. Khan, A. I. Jalal and A. Mumtaz, Planning for Energy in Pakistan, In Renewable Energy Sources: International Progress, Part B, p. 409, Elsevier, Amsterdam (1984). Energy Year Book 1984, Directorate General of Energy Resources, Ministry of Petroleum and Natural Resources, Islamabad (1985). Chemical Consultants (Pakistan), Limited, Feasibility Study on the Utilization of Coal in Substitution of Other 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 AsiaPacific Region, East-West Center, Honolulu (1983). L. Grainger and J. Gibson, Coal Utilization: Technology, Economics and Policy, Graham & Trotman, London (1981). Ch. Manthey, (ed.) Energy Technology Data Handbook, Vol. 1, Conversion Technologies, IEA Energy Systems Analysis 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 Commission of Pakistan, Islamabad (1983).

5.

6. I. 8. 9.