Partners plan to make greater use of nation's huge reserves, reduce import reliance

As a coal-to-gas boom grows in China, the founding of a new joint venture to develop gasification technologies marks part of the country's multi-billion-yuan effort to lessen dependency on oil imports.

State-owned Shenhua Group, China's largest coal producer, will work with General Electric Co to advance the development of "cleaner coal" technology and solutions through the 50-50 joint venture.

The GE Shenhua Gasification Technology Co Ltd, headquartered in Shanghai, aims to combine GE's expertise in industrial gasification technologies with Shenhua's skill in coal-fired power generation, said general manager Dong Honghai.

The firm will sell industrial gasification technology licenses in China, conduct research to improve cost and performance and work to advance to distribution of "commercial-scale integrated gasification combined cycle" projects, he told a news conference on Thursday.

The cooperation is also part of Sino-US joint efforts to develop clean energy, and gasification is a crucial component of that goal.

The company has registered capital of $6 million. Patents and proceeds obtained by the venture will be shared evenly, said Lu Zhengping, president of Shenhua Coal to Liquid and Chemical Co Ltd, a subsidiary of Shenhua Group.

With more than 50 licensed facilities in China, GE's gasification technology is one of the most widely deployed in the industry.

Coal-to-gas technology allows us to use this abundant, low-cost (coal) resource in a much cleaner way, said Paul Browning, president of thermal products at GE Energy.

Coal gasification is a process that converts coal from a solid to a gaseous form through catalysis. The gasified products can be used as fuels, raw materials for chemical products and for electricity generation.

According to a UNESCO study in 2007, coal accounts for 94.3 percent of China's proven fossil fuel reserves. It still supplies 70 percent of China's energy.

These abundant coal resources can serve as the primary raw materials of industrial chemicals, such as industrial-scale production of natural gas, while the hydrogen obtained from gasification can be used to make ammonia or upgrade fossil fuels.

Many coal gasification facilities in China are fixed-bed gasifiers, which is an early-stage technique that converts the coal in a very unsustainable way through using large amounts of raw material and emitting carbon dioxide and waste water, said Gong Xin, a professor from the Institute of Clean Coal Technology at East China University of Science and Technology.

According to Gong, China's indigenous coal-gasification technology - such as opposed multi-burner technology - was commercialized in 2005 and has a one-third share of the domestic market.

In many key aspects, it outperformed that of world-class technology holders, including GE, she said.

To further support this fast-growing sector, the Ministry of Industry and Information Technology will provide 10 billion yuan ($1.58 billion) to support 19 coal chemical enterprises with advanced coal-gasification technologies.

According to a circular published in April, during the 12th Five-Year Plan (2011-15), the country aims to save the equivalent of 1.71 million tons of coal annually through such technology upgrades.

hewei@chinadaily.com.cn