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Methanol Production from Coal Analysis

Q: Analyze how using CO2 as a transport gas in the coal feeding system influences the downstream methanol synthesis process.

Using CO2 as a transport gas in the coal feeding system helps remove inert gases like N2, which are not beneficial for methanol synthesis. The presence of CO2, rather than N2, in the transport system results in less buildup of inert species in the methanol recycle loop, reducing the size of necessary equipment and optimizing the downstream synthesis process. This streamlined gas composition allows for more efficient methanol synthesis with minimal equipment modification .

Q: How does the design of the methanol reactor system affect the handling of side reactions and impurities during synthesis?

The methanol reactor, designed as a catalytic packed-bed reactor, handles side reactions by ensuring efficient conversion of hydrogen and carbon monoxide while minimizing by-products like ethanol, propanol, and formaldehyde. Technologies such as in-line blowers, coolers, and knock-out drums are critical in maintaining appropriate temperature and pressure conditions, effectively reducing impurities such as acetone and acetaldehyde. The system's design helps maintain product quality by facilitating phase separation and methanol recovery .

Q: Analyze the role of carbon dioxide sequestration in Case 2 of the methanol production configuration and its environmental implications.

In Case 2, CO2 is not vented but instead captured from the Rectisol unit, compressed, and sequestered, which significantly reduces the carbon footprint of methanol production . This approach mitigates environmental impact by lowering greenhouse gas emissions, aligning the production process closer to sustainable practices. It demonstrates a commitment to carbon management though introducing additional costs and technical challenges related to CO2 capture and storage technologies .

Q: How does the choice of catalyst in the reforming process affect syngas production for methanol synthesis?

The choice of catalyst, specifically nickel supported on alumina, facilitates the endothermic reforming of the feedstock to syngas in the autothermal reformer (ATR). This catalyst allows for effective conversion of feedstock, with steam and oxygen adjustments to achieve an optimal H2/CO ratio and prevent excessive coking . A catalyst with different properties might alter efficiency or reaction conditions, impacting the syngas quality or yield.

Q: What are the implications of choosing a vapor-phase methanol process over a liquid-phase process regarding operational experience and scalability?

Selecting a vapor-phase methanol process leverages the extensive operational experience and proven scalability of existing production units, mitigating operational risks and ensuring reliability . In contrast, liquid-phase methanol processes lack commercial operation precedence, leading to potential scalability challenges and uncertainties in efficiency and product purity. The advancement of mega-methanol projects could potentially change this perspective by providing necessary operational experience for liquid-phase processes .

Q: Discuss how the integration of methanol synthesis loop components supports near isothermal operation in the reactor.

In the methanol synthesis loop, near isothermal operation is achieved by integrating steam cooling within the catalytic packed-bed reactor, maintaining a consistent temperature of 475ºF at an operational pressure of 735 psia. The configuration involving in-line blowers, coolers, knock-out drums, and recycled syngas allows for effective heat management, preventing hot spots and ensuring uniform catalyst activity, critically maintaining equilibrium-limited reactions . This integration enhances reaction efficiency and selectivity towards methanol production.

Q: Evaluate the economic risks related to the excess power production in methanol plants using natural gas compared to coal.

Natural gas-based methanol plants have inherent economic risks due to excess power production, which results from heat recovery and tail gas combustion. The power is a by-product and must be sold at a discount, which is project-dependent and introduces significant variability in revenue streams . In contrast, coal-based plants use exhaust gases for coal drying and rely on additional natural gas combustion, resulting in less excess power. Therefore, coal-based plants face lower economic uncertainty regarding by-product power sales, though their fuel costs remain a concern .

Q: How does the use of an oxygen-blown Shell quench-type gasifier affect the conversion efficiency of coal to syngas?

The oxygen-blown Shell quench-type gasifier allows high-carbon conversion efficiency, achieving over 99% conversion. It operates at high temperatures and pressures (2,550°F and 650 psia), which contributes to efficient syngas production by facilitating complete gasification of the coal feedstock. Additionally, the use of superheated steam and a membrane wall reactor design further enhance syngas generation by optimizing reaction conditions and heat management .

Q: What are the main differences in auxiliary power requirements between the coal-based methanol production cases and the natural gas-based case?

In the coal-based methanol production cases, the auxiliary power requirements are met by combining small gas turbines with heat recovery steam generation (HRSG) systems to power steam turbines. The auxiliary power generation is enhanced by natural gas-fueled combustion turbines because the exhaust gases are used for coal drying, which maximizes the production of crude methanol . Conversely, in the natural gas-based case, excess power is generated due to the combustion of tail gases and significant heat recovery from the exothermic synthesis process. This excess power can be sold to the grid, although at a reduced price due to its nature as a by-product .

Q: What is the impact of moisture content on the gasification process and what measures are taken to address it?

Moisture content directly impacts the amount of O2 required for gasification, as moisture affects the energy balance in the gasifier. Therefore, the coal must be dried before feeding it into the gasifier. To achieve this, PRB coal is dried to 6% moisture through a process where heat is provided by incinerating tail-gas from the Claus plant. This drying process ensures smooth coal flow and optimal energy input for gasification, which affects syngas production efficiency .

This document analyzes the production of crude methanol from coal and natural gas feedstocks. It examines three cases - a coal gasification process, a natural gas steam reforming process, and an integrated gasification combined cycle (IGCC) process using coal. For each case, the document models the process performance, estimates capital and operating costs, and calculates the minimum selling price required for the process to be economically viable. It finds the IGCC case has the lowest required selling price at $461/MT, followed by the natural gas case at $489/MT and the coal gasification case at $512/MT. The key factors in the costs are the capital costs and the prices of coal and natural gas feedstocks.

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Methanol Production from Coal Analysis

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Baseline Analysis of Crude Methanol

Production from Coal and Natural Gas

Revised October 15, 2014

DOE/NETL-341/101514

OFFICE OF FOSSIL ENERGY

Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Disclaimer
This report was prepared as an account of work sponsored by an agency of the United States
Government. Neither the United States Government nor any agency thereof, nor any of their
employees, makes any warranty, express or implied, or assumes any legal liability or
responsibility for the accuracy, completeness, or usefulness of any information, apparatus,
product, or process disclosed, or represents that its use would not infringe privately owned rights.
Reference therein to any specific commercial product, process, or service by trade name,
trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement,
recommendation, or favoring by the United States Government or any agency thereof. The
views and opinions of authors expressed therein do not necessarily state or reflect those of the
United States Government or any agency thereof.
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Baseline Analysis of Crude Methanol

Production from Coal and Natural Gas

DOE/NETL-341/101514

Final Report
October 15, 2014

NETL Contact:
William Summers
Technical Project Monitor
Office of Program Performance & Benefits, Performance Division

National Energy Technology Laboratory

[Link]
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Prepared by:
Energy Sector Planning and Analysis (ESPA)

Jesse F. Goellner
Booz Allen Hamilton, Inc.
Norma J. Kuehn
Booz Allen Hamilton, Inc.
Vasant Shah
Booz Allen Hamilton, Inc.
Charles W. White III
Noblis, Inc.
Mark C. Woods
Booz Allen Hamilton, Inc.

DOE Contract DE-FE0004001

Task 04001.341.02, Activity 022
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Acknowledgments
This report was updated by Energy Sector Planning and Analysis (ESPA) for the United States
Department of Energy (DOE), National Energy Technology Laboratory (NETL). This work was
completed under DOE NETL Contract Number DE-FE0004001. This work was performed
under ESPA Task 04001.341.02, Activity 022.
The authors wish to acknowledge the excellent guidance, contributions, and cooperation of the
NETL staff and other past contributors, particularly:
William Summers, NETL, Office of Program Performance and Benefits
Kristin Gerdes, NETL, Office Director, Office of Program Performance and Benefits
John Wimer, NETL, Office Director, Office of Coal and Power R&D

Acknowledgments for permissions to use figures

All figures in this report derive from NETL.
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

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Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Table of Contents
List of Exhibits .............................................................................................................................. ii
List of Acronyms and Abbreviations ......................................................................................... iv
Executive Summary .......................................................................................................................1
1 Overview .................................................................................................................................5
1.1 Background ......................................................................................................................5
1.2 Case Descriptions.............................................................................................................5
2 Design Criteria .......................................................................................................................6
2.1 Site Description ................................................................................................................6
2.2 Design Feedstocks ...........................................................................................................7
2.2.1 Natural Gas Characteristics ........................................................................................7
2.2.2 Coal Characteristics ....................................................................................................8
2.3 Environmental Requirements...........................................................................................9
2.4 Balance of Plant Requirements ......................................................................................11
2.5 Crude Methanol – Deviations from the C-MTG Study .................................................12
3 Crude Methanol Model Performance Results ...................................................................13
3.1 Technology Background and Readiness Assumptions ..................................................13
3.2 Modeled Performance Summary ...................................................................................13
3.3 Process Descriptions ......................................................................................................18
3.3.1 General Process Descriptions ...................................................................................19
3.3.2 Air Separation Unit ....................................................................................................20
3.3.3 Coal Gasification Syngas Process Description .........................................................21
3.3.4 Natural Gas / Steam Reforming .................................................................................25
3.3.5 Methanol Reactor and Synthesis Loop - All Cases ....................................................25
3.3.6 Heat Recovery and Power Generation ......................................................................26
3.3.7 Water Balance ............................................................................................................26
4 Economic Analysis ...............................................................................................................51
4.1 Cost Estimating Methodology .......................................................................................51
4.1.1 Capital Costs..............................................................................................................51
4.1.2 Feedstock prices.........................................................................................................51
4.1.3 Production Costs and Expenses .................................................................................52
4.1.4 Required Selling Price ...............................................................................................52
4.2 Cost Estimation results ..................................................................................................54
4.3 Summary Comparisons ..................................................................................................61
5 References .............................................................................................................................69

i
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

List of Exhibits
Exhibit ES-1 Cost estimation results .............................................................................................. 1
Exhibit ES-2 Sensitivity of the required selling price to the coal price .......................................... 3
Exhibit ES-3 Sensitivity of the required selling price to the natural gas price ............................... 4
Exhibit 1-1 Case descriptions ......................................................................................................... 5
Exhibit 2-1 Site ambient conditions ................................................................................................ 6
Exhibit 2-2 Site characteristics ....................................................................................................... 6
Exhibit 2-3 Natural gas composition .............................................................................................. 7
Exhibit 2-4 Montana Rosebud PRB, Area D, Western Energy Co. Mine, subbituminous design
coal analysis ............................................................................................................................ 8
Exhibit 2-5 BACT environmental design basis .............................................................................. 9
Exhibit 2-6 CO2 pipeline specification ......................................................................................... 10
Exhibit 2-7 Balance of plant design requirements ........................................................................ 11
Exhibit 3-1 Mass balance summary of coal to crude methanol plant ........................................... 15
Exhibit 3-2 Mass balance summary of natural gas to crude methanol plant ................................ 15
Exhibit 3-3 Stream compositions to and from methanol synthesis process.................................. 16
Exhibit 3-4 Auxiliary power load summary of CTM plants ......................................................... 17
Exhibit 3-5 Auxiliary power load summary of NGTM plant ....................................................... 17
Exhibit 3-6 Performance summary of NGCC plants .................................................................... 18
Exhibit 3-7 Simplified process flow diagram of coal to crude methanol ..................................... 19
Exhibit 3-8 Simplified process flow diagram of natural gas to crude methanol .......................... 20
Exhibit 3-9 Coal drying process flow diagram ............................................................................. 27
Exhibit 3-10 Mass balance of coal drying process ....................................................................... 28
Exhibit 3-11 Shell gasification process flow diagram .................................................................. 29
Exhibit 3-12 Mass balance of gasification process ....................................................................... 30
Exhibit 3-13 CO shift reaction process flow diagram .................................................................. 31
Exhibit 3-14 Mass balance of shift reaction process .................................................................... 32
Exhibit 3-15 Low temperature gas cooling process flow diagram ............................................... 33
Exhibit 3-16 Mass balance of low temperature gas cooling ......................................................... 34
Exhibit 3-17 Rectisol process flow diagram ................................................................................. 35
Exhibit 3-18 Claus process flow diagram ..................................................................................... 37
Exhibit 3-19 Mass balance of Rectisol and Claus processes ........................................................ 38
Exhibit 3-20 Natural gas reforming process flow diagram ........................................................... 40
Exhibit 3-21 Mass balance of natural gas reforming .................................................................... 41
Exhibit 3-22 Methanol synthesis process flow diagram ............................................................... 42
Exhibit 3-23 Mass balance of methanol synthesis ........................................................................ 43
Exhibit 3-24 Power cycle heat and material balances .................................................................. 45
Exhibit 3-25 Water balances ......................................................................................................... 48
Exhibit 4-1 Financial assumptions for PSFM [17] ....................................................................... 53
Exhibit 4-2 Financial structure for commercial fuels projects [] .................................................. 54
Exhibit 4-3 Financial structure for loan guarantee projects [] ...................................................... 54
Exhibit 4-4 Capital cost summary for Case 1 ............................................................................... 55
Exhibit 4-5 Capital cost summary for Case 2 ............................................................................... 56
Exhibit 4-6 Capital cost summary for Case 3 ............................................................................... 57
Exhibit 4-7 O&M cost summary for Case 1 ................................................................................. 58

ii
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-8 O&M cost summary for Case 2 ................................................................................. 59

Exhibit 4-9 O&M cost summary for Case 3 ................................................................................. 60
Exhibit 4-10 Cost estimation results ............................................................................................. 61
Exhibit 4-11 Components of required selling price ...................................................................... 62
Exhibit 4-12 Sensitivity of the required selling price to the coal price ........................................ 63
Exhibit 4-13 Sensitivity of the required selling price to the natural gas price .............................. 64
Exhibit 4-14 Sensitivity of the required selling price to the electric selling price ........................ 65
Exhibit 4-15 Sensitivity of RSP to CO2 plant gate sales price ..................................................... 66
Exhibit 4-16 Sensitivity of the required selling price to the capacity factor ................................ 67
Exhibit 4-17 Sensitivity of the required selling price to the capital charge factor ....................... 68

iii
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

List of Acronyms and Abbreviations

AGR Acid gas removal HP High pressure
ASU Air separation unit hp Horsepower
ATR Autothermal reformer hr hour
BACT Best available control technology HRSG Heat recovery steam generator
BAH Booz Allen Hamilton Inc. HVAC Heating, Ventilation, & Air
bbl Barrel Conditioning
BEC Bare erected cost IEA International Energy Agency
BOP Balance of plant IGCC Integrated gasification combined cycle
BPD Barrel per day IOU Investor-owned utility
Btu British thermal unit IPCC Intergovernmental Panel on Climate
C-MTG Coal-to-methanol-to-gasoline Change
CB-MTG Coal and biomass-to-methanol-to- IRR Internal rate of return
gasoline IRROE Internal rate of return on equity
CBTL Coal and biomass-to-liquids ISO International Organization for
CCF Capital charge factor Standardization
CCS Carbon capture and sequestration kJ Kilojoule
CCUS Carbon capture, utilization, and storage kPa Kilopascal absolute
CH3OH Methanol kW, kWe Kilowatt (electric)
Cm centimeter kWh Kilowatt-hour
CMM Coal mine methane kWt Kilowatt (thermal)
CMT Constant Maturity Treasury LAER Lowest achievable emission rate
CO Carbon monoxide lb Pound
CO2 Carbon dioxide lbmole Pound mole
CO2E Carbon dioxide equivalent LHV Lower heating value
COE Cost of oil equivalent LIBOR London Interbank Offered Rate
COP Crude oil price LNB Low NOx burner
COS Carbonyl sulfide LOX Liquid oxygen
CTL Coal to liquids LPG Liquefied petroleum gas
CTM Coal-to-methanol m Meter
DB Daily barrel MJ Megajoules
DME Di-methyl ether MMBtu/hr Million British thermal units (also
DOE Department of Energy shown as 106 Btu) per hour
DSCR Debt service coverage ratio mol% Mole percent
EIA Energy Information Administration MON Motor octane number
EISA Energy Independence and Security Act MPa Megapascal absolute
EOR Enhanced oil recovery MTG Methanol to gasoline
EPA Environmental Protection Agency MW, MWe Megawatt (electric)
EPC Engineering/procurement/construction MWh Megawatt-hour
EPCM Engineering/procurement/construction MWt Megawatt (thermal)
management N2 Nitrogen
ERC Emission reduction credits N2O Nitrous oxide
FCR Fixed charge rate Neg. Negligible
ft feet NETL National Energy Technology
GHG Greenhouse gas Laboratory
GHGEV Greenhouse gas emission value NGCC Natural gas combined cycle
GJ Gigajoule NGPA Natural Gas Policy Act
gpm Gallon per minute NGTM Natural gas to methanol
GWP Global warming potential NOx Oxides of nitrogen
H2 Hydrogen NSR New Source Review
H 2S Hydrogen sulfide N/A Not applicable
HGT Heavy gasoline treatment O2 Oxygen
HHV Higher heating value O&GJ Oil and Gas Journal

iv
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

O&M Operations and maintenance scm standard cubic meter

PFD Process flow diagram SCR Selective catalytic reduction
PM Particulate matter SO2 Sulfur dioxide
POTW Publicly owned treatment works TASC Total as-spent cost
ppb Parts per billion TOC Total overnight cost
ppbv Parts per billion volume tonne Metric ton (1000 kg)
ppm Parts per million TPC Total plant cost
ppmd Parts per million, dry T&S Transport and storage
ppmv Parts per million volume U.S. United States
ppmvd Parts per million volume, dry vol% Volume percent
PRB Powder River Basin coal WGSR Water gas shift reactor
PSA Pressure swing adsorption wt% Weight percent
PSFM Power systems financial model WTW Well-to-wheels
psia Pound per square inch absolute °C Degrees Celsius
psig Pound per square inch gauge °F Degrees Fahrenheit
QGESS Quality Guidelines for Energy System $M Millions of dollars
Studies μS microSiemens
RAND RAND Corporation
ROE Return on equity
RON Research octane number
RSP Required selling price
scf standard cubic feet

v
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

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vi
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Executive Summary
Gasification of coal, in addition to generating syngas for power production, has the potential to
produce a diverse array of high-value products. It is a challenge to understand the optimal use of
this domestic coal resource amidst the potential technology options, product slates (including co-
production of power), and competing feedstocks (natural gas, petroleum). This analysis seeks to
begin addressing that challenge by focusing on one primary product, methanol, which also serves
as a readily-transportable intermediate to many other products including olefins, gasoline, and di-
methyl ether (DME). This report presents the design configuration, performance summaries, and
cost estimates of three cases which generate crude methanol.
 Case 1: Coal-to-crude methanol without carbon capture and sequestration (CCS)
(i.e., representing a building block to other derivatives, not chemical-grade methanol)
 Case 2: Coal-to-crude methanol with CCS
 Case 3: Natural gas-to-crude methanol with CCS

The required selling price (RSP) of crude methanol was estimated for each case and the results
are listed in Exhibit ES-1. The RSP for the natural gas case is significantly lower than the coal
cases due primarily to the lower capital requirements, which more than offset the higher
feedstock cost.

Exhibit ES-1 Cost estimation results

Case 1 2 3
Total Plant Cost (2011 million$) 4,586 4,882 2,172
Total Overnight Cost (2011 million$) 5,615 5,973 2,644
B
Total As-spent Capital (2011 million$) 6,440 6,631 6,851 7,054 3,033 3,123
A
RSP Component Details ($/gal)
B
Capital 0.85 1.09 0.91 1.16 0.40 0.52
Fixed O&M 0.14 0.15 0.07
Variable O&M 0.09 0.09 0.03
Coal 0.21 0.21 0
Natural gas 0.03 0.05 0.57
Power 0 0 -0.05
CO2 T&S 0 0.06 0.01
B
RSP Total ($/gal) 1.31 1.56 1.46 1.72 1.03 1.14
E
RSP Total ($/ton) 396.70 469.29 441.44 518.67 311.17 345.39
BC
Costs of CO2 captured ($/tonne) N/A 16.36 19.20 N/A
BD
Cost of CO2 avoided ($/tonne) N/A 29.67 32.75 N/A
A
Capacity factor assumed to be 90 percent.
B
Values are shown for two financial structures.
The first (lower) value is based on the loan guarantee finance structure.
The second (higher) value is based on the commercial fuels finance structure.
C
Excludes CO2 transport and storage (T&S).
D
Includes CO2 T&S.
E
Based on 332.6 gal/tonne or 301.73 gal/ton.
All costs are in June 2011 dollars.

1
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

The sensitivity of the RSP to the coal and natural gas feedstock prices is illustrated in
Exhibit ES-2 and Exhibit ES-3, respectively. The prices used in this study are based on the
National Energy Technology Laboratory (NETL) Quality Guidelines for Energy System Studies
(QGESS) Recommended Fuel Prices. [1] Cases 1 and 2 use coal from the Powder River Basin
(PRB) region in Montana, priced at $36.57/ton ($2.1351/MMBtu) including delivery to the
Midwestern site, as the feedstock. Case 3 uses natural gas, priced at $6.13/MMBtu. Cases 1
and 2 also burn some natural gas to provide additional power required by the process.1 The
expected RSPs for the case using natural gas as feedstock are below those for the coal-based
cases because of the lower capital and fixed operating charges. On an energy content basis, the
RSPs for all cases increase at approximately the same rate with increases in the feedstock prices
due to the similarity between the feedstock requirements per unit of product. Cases 1 and 2
require 9.75 MMBtu of PRB coal per gallon of methanol generated and Case 3 requires
9.27 MMBtu of natural gas per gallon of methanol generated.
Given the higher cost per MMBtu of natural gas relative to coal and the similar energy input
requirements of the conversion process, a 100 percent increase in natural gas prices leads to a 50
to 55 percent increase in RSP, for commercial and loan guarantee financing respectively, versus
a 100 percent increase in coal prices leading to a 13 to 16 percent increase in RSP consistent with
the natural gas–based methanol production being the less capital intense but more operating
margin dependent technology choice. Hence, the natural gas route is more exposed to feedstock
price volatility.

1
A natural gas combined cycle plant was used to generate additional power in the coal gasification cases to make the plant approximately power
neutral while maximizing the production of crude methanol (i.e., no syngas is diverted for power production).

2
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit ES-2 Sensitivity of the required selling price to the coal price
3.00
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.50
QGESS
PRB Coal Price
$36.57/ton
($2.14/MMBtu)
2.00

1.50

1.00
Loan Guarantee Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
0.50
Commercial Fuel Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
0.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Price of PRB Coal ($/MMBtu)
0 25 50 75 100 125 150 175 200 225
Price of PRB Coal ($/ton)
* Coal cases include constant natural gas price at $6.13/MMBtu for NGCC

Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

3
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit ES-3 Sensitivity of the required selling price to the natural gas price
3.00
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.50
QGESS
Natural Gas Price
$6.13/MMBtu

2.00

1.50

1.00
Loan Guarantee Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
0.50 Case 3 - NG to Methanol w/ CO₂ capture
Commercial Fuel Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
0.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Price of Natural Gas ($/MMBtu)
* Coal cases include constant PRB coal price at $2.14/MMBtu

Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

4
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

1 Overview
This report presents the design configuration, performance, and cost of the three crude methanol
cases.
1.1 Background
Gasification of coal, in addition to generating syngas for power production, has the potential to
produce a diverse array of high-value products. It is a challenge to understand the optimal use of
this domestic coal resource amidst the potential technology options, product slates (including co-
production of power), and competing feedstocks (natural gas, petroleum). This analysis seeks to
begin to address that challenge by focusing on one primary product, methanol, which also serves
as a readily-transportable intermediate to many other products including olefins, gasoline, and di-
methyl ether (DME). The information from this analysis and previous studies can be used, along
with available data on the production of methanol derivatives, in developing a framework for
evaluating and optimizing the utilization of domestic coal and natural gas resources.
1.2 Case Descriptions
For each of the cases listed in Exhibit 1-1, and also described below, a system study was
completed in accordance with the May 2010 version of the report, “Scope and Reporting
Requirements for NETL System Studies.” [2] The cases in this report are limited to the
following:
 Coal-to-crude methanol with and without carbon capture and sequestration (CCS)
(i.e., representing a building block to other derivatives, not chemical-grade methanol)
 Natural gas-to-crude methanol with CCS
All three cases are sized to produce approximately 10,000 metric tons of methanol per day
(3,326,000 gal/day based on 332.6 gal/tonne [3]). This plant size is considered large scale but
typical for the current design of new plants. [4] This report presents the results of the
performance modeling and cost estimating for the crude methanol product cases (cases 1, 2, and
3).
Exhibit 1-1 Case descriptions

Steam Sulfur CO2

Combustion Gasifier
Case Feedstock Cycle, Oxidant Removal/ Separa- Product(s)
Turbine* Technology
psig/F/F Recovery tion
1800/1050/ 95 mol% Rectisol/ Crude
1 Coal/Syngas SGT-1000F Shell Rectisol**
1050 O2 Claus Plant Methanol
1800/1050/ 95 mol% Rectisol/ Rectisol & Crude
2 Coal/Syngas SGT6-2000E Shell
1050 O2 Claus Plant Amine*** Methanol
1800/1050/ 95 mol% Crude
3 Natural Gas SGT6-3000E N/A N/A Amine
1050 O2 Methanol
*Turbine selection based on vendor data included in GT PRO software by Thermoflow, Inc. [5]
**CO2 removed by the Rectisol process and not used for coal transportation is vented.
***Amine process added to NGCC system only.

5
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

2 Design Criteria
2.1 Site Description
All plants in this study are assumed to be located at a generic plant site in Midwestern U.S., with
ambient conditions and site characteristics as presented in Exhibit 2-1 and Exhibit 2-2. These
assumptions are identical to the National Energy Technology Laboratory (NETL) baseline
studies. [6,7] The ambient conditions are the same as International Organization for
Standardization (ISO) conditions.
Exhibit 2-1 Site ambient conditions

Description Values
Elevation, m, (ft) 0, (0)
Barometric Pressure, MPa (psia) 0.10 (14.696)
Design Ambient Temperature, Dry Bulb, °C (F) 15 (59)
Design Ambient Temperature, Wet Bulb, °C (F) 11 (51.5)
Design Ambient Relative Humidity, % 60

Exhibit 2-2 Site characteristics

Description Conditions
Location Greenfield, Midwestern USA
Topography Level
Size, acres 300
Transportation Rail
Ash Disposal Off Site
Water Municipal (50%) / Groundwater (50%)
Access Land locked, having access by rail and highway
Compressed to 15.3 MPa (2,215 psia), transported 80 kilometers (50 miles)
CO2 Storage
and sequestered in a saline formation at a depth of 1,239 m (4,055 ft)

As assumed for gasification-based cases in the NETL baseline studies, the land area for these
cases (including the natural gas reforming case) is estimated as 30 acres required for the plant
proper with the balance providing a buffer of approximately 0.25 miles to the fence line. [6] The
extra land could also provide for a rail loop, if required.

In all cases, it was assumed that the steam turbine is enclosed in a turbine building. The
gasifiers, reformers, methanol synthesis reactors, and the combustion turbines are not enclosed.
Allowances for normal conditions and construction are included in the cost estimates. The
following design parameters are considered site-specific, and are not quantified for this study.
Costs associated with the site specific parameters can have significant impact on capital cost
estimates.
 Flood plain considerations
 Existing soil/site conditions
 Water discharges and reuse
 Rainfall/snowfall criteria
 Seismic design

6
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

 Buildings/enclosures
 Local code height requirements
 Noise regulations – Impact on site and surrounding area

2.2 Design Feedstocks

2.2.1 Natural Gas Characteristics
The natural gas composition used in this analysis, representative of natural gas after going
through standard midstream processing, is presented in Exhibit 2-3. [8]

Exhibit 2-3 Natural gas composition

Component Volume Percentage

Methane CH4 93.1
Ethane C2H6 3.2
Propane C3H8 0.7
n-Butane C4H10 0.4
Carbon Dioxide CO2 1.0
Nitrogen N2 1.6
Total 100.0
Units LHV HHV
kJ/kg 47,454 52,581
MJ/scm 34.71 38.46
Btu/lb 20,410 22,600
Btu/scf 932 1,032
Note: Feedstock composition is normalized and heating values are calculated.
For the purposes of this study no sulfur content was considered.

7
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

2.2.2 Coal Characteristics

The coal properties from National Energy Technology Laboratory’s (NETL) Quality Guidelines
for Energy System Studies (QGESS): Specifications for Selected Feedstocks, for a
subbituminous Powder River Basin (PRB) coal from Montana are shown in Exhibit 2-4. [8]

Exhibit 2-4 Montana Rosebud PRB, Area D, Western Energy Co. Mine,
subbituminous design coal analysis
Proximate Analysis Dry Basis, % As Received, %
Moisture 0.0 25.77
Ash 11.04 8.19
Volatile Matter 40.87 30.34
Fixed Carbon 48.09 35.70
Total 100.0 100.0
Ultimate Analysis Dry Basis, % As Received, %
Carbon 67.45 50.07
Hydrogen 4.56 3.38
Nitrogen 0.96 0.71
Sulfur 0.98 0.73
Chlorine 0.01 0.01
Ash 11.03 8.19
Moisture 0.00 25.77
1
Oxygen 15.01 11.14
Total 100.0 100.0
Heating Value Dry Basis As Received
HHV, kJ/kg 26,787 19,920
HHV, Btu/lb 11,516 8,564
LHV, kJ/kg 25,810 19,195
LHV, Btu/lb 11,096 8,252
Hardgrove Grindability Index 57
Ash Mineral Analysis %
Silica SiO2 38.09
Aluminum Oxide Al2O3 16.73
Iron Oxide Fe2O3 6.46
Titanium Dioxide TiO2 0.72
Calcium Oxide CaO 16.56
Magnesium Oxide MgO 4.25
Sodium Oxide Na2O 0.54
Potassium Oxide K2O 0.38
Sulfur Trioxide SO3 15.08
Phosphorous Pentoxide P2O5 0.35
Barium Oxide Ba2O 0.00
Strontium Oxide SrO 0.00
Unknown --- 0.84
Total --- 100.0
Trace Components ppmd
2
Mercury Hg 0.081
1
By difference
2
Mercury value is the mean plus one standard deviation using EPA’s ICR data

8
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

2.3 Environmental Requirements

The environmental limits presented in this section refer to the gasification/power cycle only,
because the environmental requirements for the methanol plant are considered beyond the scope
of the study.
The environmental targets for the study were considered on a technology- and fuel-specific basis.
Since all the cases are located at a greenfield site, permitting a new plant would involve the New
Source Review (NSR) permitting process. The NSR process requires installation of emission
control technology, meeting either the best available control technology (BACT) determinations
for new sources located in areas meeting ambient air quality standards (attainment areas), or the
lowest achievable emission rate (LAER) technology for sources located in areas that do not meet
ambient air quality standards (non-attainment areas). This study uses the BACT guidelines,
which are summarized in Exhibit 2-5.

Exhibit 2-5 BACT environmental design basis

Environmental Design Basis

Pollutant Control Technology Limit
®
Rectisol + Claus Plant/ 6
Sulfur Oxides (SO2) ≤ 0.050 lb/10 Btu
Econamine Plus
LNB and N2 Dilution primarily
Nitrogen Oxides (NOx) 15 ppmvd (@ 15% O2)
with humidification as needed
Cyclone/Barrier Filter/Wet 6
Particulate Matter (PM) 0.006 lb/10 Btu
Scrubber/AGR Absorber
Mercury (Hg) Activated Carbon Bed 95% removal

Selection of the process technology accounts for obtaining minimum sulfur content in the syngas
and final product.
The following regulatory assumptions are used for assessing environmental control technologies:
 NOx Emission Reduction Credits (ERC) and allowances are not available for the project
emission requirements when located in the ozone attainment area
 Solid waste disposal is either offsite at a fixed $/ton fee or is classified as a byproduct for
reuse, claiming no net revenue ($/ton) or cost
 Raw water is available to meet technology needs
 Wastewater discharge will meet effluent guidelines rather than water quality standards
for this screening
Based on published vendor literature, it was assumed that low NOx burners (LNB) and nitrogen
dilution can meet 15 ppmv (dry) limits on NOx emissions from the combustion turbines at
15 percent O2. This value was used for all cases.
The acid gas removal (AGR) process in the coal gasification cases must have a sulfur capture
efficiency of about 99.7 percent to reach the environmental target and to also produce sulfur-free
syngas to avoid poisoning of catalysts in methanol synthesis process. Vendor data on AGR
processes used indicate that this level of sulfur removal is possible.

9
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

In the CO2 capture cases, the two-stage Rectisol process in the coal gasification cases was
designed for 90 percent plant CO2 removal. The amine capture process for the natural gas case
and the natural gas combined cycle (NGCC) system in the coal fired gasification case with
capture was also designed for 90 percent plant CO2 removal. The 90 percent capture design for
both CO2 point sources results in an overall 90 percent capture rate for the plant.
For the coal feedstock cases, most of the coal ash is removed from the gasifier as slag. Any ash
that remains entrained in the syngas is captured in the downstream equipment, including the
syngas scrubber and a cyclone followed by either ceramic or metallic candle filters. The
environmental target can be achieved with the combination of particulate control devices.
Mercury capture is not required for the case with processed natural gas as the starting feedstock.
For the coal feedstock cases, however, the environmental target for mercury capture is greater
than 90 percent capture. Eastman Chemical’s operating experience at its coal-to-methanol plant
in Kingsport, Tennessee has shown mercury removal efficiency of 95 percent. This value was
used as the assumed performance level for this study. Sulfur-impregnated activated carbon is
used by Eastman as the adsorbent in the packed beds operating at 30°C (86°F) and 6.2 MPa (900
psig). Mercury removal between 90 and 95 percent has been reported with a bed life of 18 to 24
months. Removal efficiencies may be even higher, but at 95 percent the measurement precision
limit is reached. Mercury removals of greater than 99 percent can be achieved by the use of dual
beds, i.e., two beds in series. However, this study assumes that the use of sulfur-impregnated
carbon in a single carbon bed achieves 95 percent reduction of mercury emissions, which meets
the environmental target limits and the New Source Performance Standards limit in all cases.
For the cases that feature carbon capture, CO2 transport and storage (T&S) was modeled based
on the specifications in the NETL QGESS: Estimating Carbon Dioxide Transport and Storage
Costs. [9] The CO2 is supplied to a 100 km (62 mi) pipeline at the plant fence line at a pressure
of 15.3 MPa (2,215 psia). The CO2 product gas composition varies in the cases presented, but is
expected to meet the specification described in Exhibit 2-6. [10] A glycol dryer located near the
mid-point of the compression train is used to meet the moisture specification.

Exhibit 2-6 CO2 pipeline specification

Parameter Units Parameter Value
Inlet Pressure MPa (psia) 15.3 (2,215)
Outlet Pressure MPa (psia) 10.4 (1,515)
Inlet Temperature °C (°F) 35 (95)
N2 Concentration Ppmv < 300
O2 Concentration Ppmv < 40
Ar Concentration Ppmv < 10
H2O Concentration Ppmv < 150

10
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

2.4 Balance of Plant Requirements

Assumed balance of plant requirements are listed in Exhibit 2-7.

Exhibit 2-7 Balance of plant design requirements

Feedstock and Other Storage

Coal 30 days
Slag 30 days
Sulfur 30 days
Natural Gas Pipeline delivery (no on site storage)
Plant Distribution Voltage
Motors below 1 hp 110/220 volt
Motors 250 hp and below 480 volt
Motors above 250 hp 4,160 volt
Motors above 5,000 hp 13,800 volt
Steam and Gas Turbine Generators 24,000 volt
Grid Interconnection Voltage 345 kV
Water and Waste Water
Cooling system Recirculating, Evaporative Cooling Tower
Makeup water The water supply is 50 percent from a local POTW and 50 percent
from groundwater, and is assumed to be in sufficient quantities to
meet plant makeup requirements.
Makeup for potable, process, and de-ionized (DI) water is drawn
from municipal sources.
Feed water Process water treatment is included and will produce boiler feed
quality water for the gasification, natural gas and steam cycle
systems.
Process Wastewater Process wastewater and storm water that contacts equipment
surfaces will be collected and treated for recycle. Selected
blowdown will be discharged through a permitted discharge permit.
Water Discharge Most of the wastewater is to be recycled for plant needs.
Blowdown will be treated for chloride and metals, and discharged.
Sanitary Waste Disposal Design will include a packaged domestic sewage treatment plant
with effluent discharged to the industrial wastewater treatment
system. Sludge will be hauled off site.
Solid Waste Gasifier slag is assumed to be a solid waste that is classified as
non-hazardous.
An offsite waste disposal site is assumed to have the capacity to
accept waste generated throughout the life of the facility.
Solid waste sent to disposal is at an assumed nominal fee per ton,
even if the waste is hauled back to the mine.
Solid waste generated that can be recycled or reused is assumed
to have a zero cost to the technology.

11
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

2.5 Crude Methanol – Deviations from the C-MTG Study

This study is based on the coal-to-methanol-to-gasoline (C-MTG) cases in the Baseline Analysis
of Subbituminous Coal and Biomass to Gasoline (Indirect Liquefaction by Methanol Synthesis)
[11] with the methanol purification and gasoline synthesis processes removed. A natural gas to
methanol case was added for comparison. The cases covered in this report simply consider a
relaxation of the product purity specifications typically associated with solvent-grade (Grade A)
and chemical-grade (Grade AA) methanol. Methanol is the raw material for many chemical
products such as formaldehyde, dimethyl terephthalate, methylamines, methyl halides, methyl
methacrylate, and acetic acid. Most importantly, methanol provides the foundation of the
methanol-to-hydrocarbon platform which has commercially proven processes to convert
methanol into gasoline and olefins (such as ethylene, the building block of the petrochemical
industry).
Since the methanol-to-hydrocarbon mechanism is fairly forgiving with respect to oxygenated
hydrocarbons and limited amounts of water, cases were considered where methanol purification
(i.e. distillation columns) was removed. This is consistent with the methanol being fed to the
commercial methanol-to-gasoline (MTG) process in New Zealand following mild equilibration
over an acidic alumina bed (to bring the methanol-DME-water into equilibrium)2. Skipping this
step (removal of methanol purification) allows for potential savings in capital investment, so it
was eliminated from the cases in this report.
Use of natural gas instead of coal significantly reduces the amount of capital investment.
Besides elimination of coal handling functions, the syngas production function of the Shell
gasifier in the coal cases is replaced by steam methane reforming, partial oxidation, or
autothermal reforming for natural-gas-based applications. Based on experience, autothermal
reforming is considered the proper technology choice for any reasonable-scale, natural-gas-fed
methanol plant. The autothermal reformer produces a H2/CO ratio of two, as preferred for
methanol synthesis, similar to the case where coal is fed to a Shell gasifier and a water-gas-shift
process.
The methanol synthesis is essentially the same following the production of syngas of an
appropriate stoichiometric number.3 The designation crude merely conveys not purifying the
methanol beyond the requirements for (essentially) immediate consumption in a methanol-to-
products (gasoline or similar) facility. This study did investigate high level adjustments to the
reactor that could lead to reduced capital expenditure, such as lowering the pressure, but the
corresponding impact on process yields made the decision to not investigate such options further
obvious. Long-range opportunities to make coal-based systems more competitive, such as
revisiting non-copper-based catalytic systems, were not analyzed. Non-copper-based catalytic
systems (i.e., zinc oxide and chromium oxide systems) are more tolerant to common coal
contaminants and, therefore, may require less capital investment. Technology scoping of these
opportunities was beyond the scope of this study.

2
An allocation of the cost of the equilibration bed should be included in evaluating this option; however, this cost is
outside the scope of this study and would be part of a more complex integrated facility cost optimization if
implemented.
3
The stoichiometric number or “S” is defined as [moles of hydrogen – moles of carbon dioxide]/[moles of carbon
monoxide + moles of carbon dioxide].

12
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

3 Crude Methanol Model Performance Results

3.1 Technology Background and Readiness Assumptions
The current status of the major technology systems included in this study is highlighted below.
 Coal gasification is a mature technology that has been deployed throughout the world,
including in conjunction with methanol synthesis plants.
 Natural gas reforming is a mature technology that has been deployed throughout the
world, including in conjunction with methanol synthesis plants.
 Reductions in the price of natural gas and increases in available quantities have made
natural gas the preeminent feedstock for commercial methanol production since the mid-
twentieth century
 Methanol synthesis from syngas is a commercial process first used in 1923. The current
catalytic process has been in widespread use since the late 1960s and is considered to be a
proven and robust technology. The current catalytic process is optimized for the
dominant natural gas feedstocks rather than coal, but is proven to be economically viable
for either feedstock. [12]
 Elemental sulfur is generated by the well-established Claus process for the coal cases.
The sulfur is collected with a purity of 99 percent.
In Cases 2 and 3, carbon dioxide is captured, treated, and compressed to meet the CO2 pipeline
specifications. CO2 specifications are negotiated and determined on a site-by-site basis. Drying
was included in the CO2 capture and compression cost estimations, but additional cleanup that
could be needed to meet more rigorous pipeline specifications was considered to be beyond the
scope of this study. [13]

3.2 Modeled Performance Summary

The three cases analyzed in this report were modeled using Aspen Plus® (Aspen). Performance
and process estimates were based upon published reports, presentations, information obtained
from vendors, cost and performance data from design/build utility projects, and/or best
engineering judgment.
The mass balances for the two coal-based cases are summarized in Exhibit 3-1. All three of the
cases are sized to produce approximately 10,000 metric tons of methanol per day
(3,326,000 gal/day based on 332.6 gal/tonne [14]). This plant size is considered large scale but
typical for the current design of new plants. [4] The Case 2 mass balance is the same as Case 1,
except that the CO2 recovered from the Rectisol unit is not vented, but rather compressed and
sequestered. The mass balance for the natural-gas-based case is shown in Exhibit 3-2.
A comparison of the syngas feed to the methanol synthesis system as well as the raw methanol
product stream is shown in Exhibit 3-3. The methanol synthesis systems for the three cases are
virtually identical.
A summary of the auxiliary power requirements for the crude methanol plants in each of the
three cases is given in Exhibit 3-4 and Exhibit 3-5. Some of the auxiliary power requirements

13
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

for each case are met by adding a heat recovery steam generation (HRSG) system to power a
steam turbine. Small gas turbines are combined with the HRSGs in each case to supply
additional power, and the performance estimates for the additional gas turbine plants are shown
in Exhibit 3-6.
In the natural gas case, the combustion turbine is fueled by the process exhaust gases solely to
recover energy value from this stream. Additional natural gas is not necessary to supply
sufficient power because the combustion of the tail gases generates excess power beyond
auxiliary power load requirements. The excess power can be sold to the grid; however, the sale
may be at a steep discount as entities that are negotiating a power purchase agreement will know
the power production is an inherent by-product of core methanol production operations.
Consequently, the actual achieved transfer price for excess power will be a significant risk in
natural gas feedstock projects and would be highly project dependent. The sensitivity of the
results to the electricity selling price received for the excess power is included in the results
section of this report and indicates that the impact on the methanol RSP is fairly small. High
excess power is endemic to the production of methanol from natural gas because there is
considerable heat recovery from the exothermic synthesis process, the production of significant
amounts of tail gas without use such as coal drying, and lower energy requirements than coal-
based processes.
In the coal cases, the exhaust gases are used in coal drying; so the combustion turbine is fueled
by natural gas to generate additional auxiliary power while maximizing the production of crude
methanol (i.e., no syngas is diverted for power production). The NGCCs are sized to meet the
auxiliary power load requirements that are beyond the capabilities of the HRSG alone and
eliminate the need for power from the local electrical grid for the coal cases. The performance
estimates for the addition of the gas turbines is shown in Exhibit 3-6

14
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-1 Mass balance summary of coal to crude methanol plant

Case 1 and 2
Stream Mole Flow
Mass Flow lb/hr
lbmole/hr
Wet coal N/A 1,618,190
Dried coal N/A 1,277,850
Oxygen from ASU containing 95% O2 31,437 1,010,968
Steam to gasifier 8,788 158,326
Input
Air for coal drying 15,000 434,322
N2 to coal drying 110,661 3,100,000
Air to direct-fired boiler 4,197 121,518
Total makeup water 310,943 5,596,974
Raw syngas from gasifier to scrubber 318,181 6,543,540
Clean syngas for methanol production 95,912 1,183,080
Fuel gas (for coal drying) 724 27,080
Intermediate
Products Flash gas (for coal drying) 2,279 90,917
Tail gas from Claus unit (for coal drying) 2,116 61,476
Purge Gas
4,693 148,223
(for coal drying and power Generation)
Crude Methanol 29,476 941,823
Final Sulfur (S8) 45 11,576
Products CO2 (Case 2 only) 35,668 1,569,410
Water discharge 124,933 2,248,798

Exhibit 3-2 Mass balance summary of natural gas to crude methanol plant
Case 3
Stream Mole Flow
Mass Flow lb/hr
lbmole/hr
Natural Gas to reformer 33,685 583,677
Input Oxygen from ASU at 95% O2 21,464 682,554
Steam to reformer 7,258 130,751
Intermediate
Clean syngas for methanol production 96,861 1,183,090
Products
Crude Methanol 29,382 940,989
Final
CO2 5,358 235,808
Products
Water discharge 22,127 1,398,202

15
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-3 Stream compositions to and from methanol synthesis process

Case 1 and 2 3
Feedstock PRB coal Natural Gas
HP Sweet HP Sweet
Raw Raw
Raw Syngas To Syngas To
Description Methanol Methanol
Syngas Methanol Methanol
Product Product
Plant Plant
Mole Fractions
AR 0.0050 0.0098 0.0001 0.0048 0.0001
N2 0.0055 0.0108 0.0000 0.0087 0.0000
CO 0.3492 0.3120 0.0000 0.3169 0.0000
CO2 0.0362 0.0359 0.0116 0.0313 0.0116
H2 0.1299 0.6284 0.0000 0.6218 0.0000
H2O 0.4723 0.0031 0.0168 0.0031 0.0168
CH4 0.0001 0.0001 0.0000 0.0134 0.0000
CH3OH 0.0000 0.0000 0.9711 0.0000 0.9711
C2H6O 0.0000 0.0000 0.0002 0.0000 0.0002
C3H8O 0.0000 0.0000 0.0001 0.0000 0.0001
TOTAL 1.0000 1.0000 1.0000 1.0000 1.0000
Total Flow (lbmole/hr) 318,181 95,912 29,317 96,861 29,317
Total Flow (lb/hr) 6,543,540 1,183,090 936,736 1,183,090 936,736
3
Total Flow (ft /hr) 5,882,680 957,495 19,523 966,372 19,523
Temperature (°F) 603.32 228.60 118.29 228.18 118.29
Pressure (psia) 605.34 755.00 380.00 755.00 380.00
3
Density (lb/ft ) 1.11 1.24 47.98 1.22 47.98
Average MW (lb/lbmole) 20.57 12.34 31.95 12.21 31.95
Molar Ratios
H2/CO2 3.58 17.50 - 19.87 -
H2/CO 0.37 2.01 - 1.96 -
(H2-CO2)/(CO+CO2) 0.24 1.70 - 1.70 -

16
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-4 Auxiliary power load summary of CTM plants

Auxiliary Power Loads(kW) Case 1 Case 2

Coal handling and milling 9,090 9,090
Slag handling 1,940 1,940
ASU 179,940 179,940
Syngas recycle compressor 6,600 6,600
Incinerator air blower 2,680 2,680
Direct-fired boiler air blower 310 310
Flash bottoms pump 720 720
Scrubber pumps 1,070 1,070
Rectisol auxiliary 51,270 51,270
Claus plant auxiliary 250 250
CO2 compressor auxiliary 9000* 68,820
Syngas compressor 20,760 20,760
Recycle gas compressor 3,370 3,370
Water treatment 3,530 3,530
Air cooler fans 1,800 1,800
Circulating water pump 9,110 9,430
Boiler feedwater pump 1,500 1,500
Cooling tower fans 360 510
Steam turbine auxiliary 100 100
Miscellaneous BOP 5,000 5,000
Total Gasification + Methanol plants 308,400 368,690
*CO2 used for coal transportation only.

Exhibit 3-5 Auxiliary power load summary of NGTM plant

Auxiliary Power (kW) Case 3

ASU 122,104
Direct-fired boiler air blower 310
Syngas compressor 20,760
Recycle gas compressor 3,370
Water treatment 3,530
Air cooler fans 1,800
Circulating water pump 9,110
Boiler feedwater pump 1,500
Cooling tower fans 360
Steam turbine auxiliary 100
Miscellaneous BOP 5,000
Total Reformer + Methanol plants 167,944

17
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-6 Performance summary of NGCC plants

Plant Output
Parameter Case 1 Case 2 Case 3 Units
Gas Turbine Power 64,800 113,700 105,000 kW e
Steam Turbine Power 256,000 276,400 204,000 kW e
Total 320,800 390,100 309,000 kW e
Auxiliary Load
Condensate Pumps 200 210 140 kW e
Boiler Feedwater Pumps 3,550 3,910 3,160 kW e
Amine System Auxiliaries 0 3,000 5,600 kW e
NGCC CO2 Compression 0 4,800 8,970 kW e
Circulating Water Pump 3,350 3,730 3,450 kW e
Ground Water Pumps 300 350 310 kW e
Cooling Tower Fans 1,730 2,030 1,780 kW e
SCR 10 10 10 kW e
Gas Turbine Auxiliaries 700 700 700 kW e
Steam Turbine Auxiliaries 100 100 100 kW e
2
Miscellaneous Balance of Plant 500 500 500 kW e
Transformer Losses 1,840 2,140 1,410 kW e
Total Methanol Synthesis
308,400 368,690 167,940 kW e
Auxiliary Power
Total 320,680 390,170 194,070 kWe
Plant Performance
Net Plant Power 120 -70 114,930 kWe
Plant Capacity Factor 90% 90% 90%
Combustion Turbine Fuel Natural Gas Natural Gas Tail Gases
13,586 23,833 109,777
Fuel Flow Rate kg/hr (lb/hr)
(29,953) (52,543) (242,0157)
1
Thermal Input (HHV) 197,940 347,226 1,599,358 kW t
1
Thermal Input (LHV) 178,469 313,069 1,442,027 kW t
Condenser Duty 1,382 (1,310) 1,456 (1,380) 971 (920) GJ/hr (MMBtu/hr)
3
Raw Water Withdrawal 42.1 (11,109) 42.1 (11,109) 12.9 (3,408) m /min (gpm)
3
Raw Water Consumption 18.9 (4,994) 18.9 (4,994) 9.9 (2,612) m /min (gpm)
1
Higher heating value (HHV) of Natural Gas 52,314 kJ/kg (22,491 Btu/lb)
Lower heating value (LHV) of Natural Gas 47,220 kJ/kg (20,301 Btu/lb)
2
Includes plant control systems; lighting; heating, ventilation, and air conditioning (HVAC); and
miscellaneous low voltage loads

3.3 Process Descriptions

This section describes the crude methanol production process, divided into the functions (as
“blocks”) of each process step. The section includes process flow diagrams (PFD) and stream
tables as referred to in the text. The diagrams and tables are grouped together at the end of this
section.

18
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

3.3.1 General Process Descriptions

The conversion of coal-to-methanol is a two-step process: first conversion of the coal to the
appropriate quality syngas via gasification and applying the water gas shift reaction, and second,
catalytically converting the syngas to methanol.
For the coal-to-methanol (CTM) cases 1 and 2, the plant configuration is illustrated in
Exhibit 3-7. Syngas is generated from the gasification of PRB coal in a high-pressure, oxygen-
blown Shell quench-type gasifier. The high temperature entrained-bed gasifier uses a partial
water quench and syngas cooler to cool the hot syngas stream and generate steam for the water
gas shift reactors and power generation. Crude raw syngas (post quench) from the gasification
unit is scrubbed and split into two streams. The first stream is fed to a sour water gas shift
reactor (WGSR) to increase the hydrogen content so that a H2/CO molar ratio of 2:1 in the feed
stream to the synthesis reactor can be achieved, and the second stream bypasses the WGSR. The
streams are combined to achieve the desired composition. This partial bypass mode of operation
allows the shift reactor to operate at a higher conversion ratio resulting in a smaller size. The
syngas is cooled in a low-temperature heat-recovery system and then cleaned of mercury, sulfur,
and CO2 in preparation for methanol synthesis. Clean syngas is fed into a fixed-bed process to
generate methanol.

Exhibit 3-7 Simplified process flow diagram of coal to crude methanol

CO2

Sulfur
Sulfur
Water Gas Acid Gas
Gasification Recovery
Shift Reactor Removal

Syngas

Coal
Methanol
Synthesis Crude Methanol

Fuel Gas

For the natural gas to methanol (NGTM) case, the plant configuration is illustrated in
Exhibit 3-8. Syngas is generated by combining natural gas, steam, and oxygen in an autothermal
reformer (ATR). The reformed syngas is cooled to recover heat at a useful temperature and fed
into a fixed-bed process to generate methanol. For this study, no additional cleanup of the
syngas was included based on the assumption that contaminants were removed from the natural
gas feedstock by the supplier. Site specific circumstances may require sulfur polishing and other

19
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

cleanup processes in a more detailed design basis, but they were considered beyond the scope
and accuracy of this study.

Exhibit 3-8 Simplified process flow diagram of natural gas to crude methanol

Steam

Oxygen

Natural Gas
Reformer

Syngas

Methanol
Synthesis Crude Methanol

Fuel Gas

3.3.2 Air Separation Unit

All cases include an air separation unit (ASU) for generating oxygen. The ASU is a
conventional, cryogenic, pumped liquid oxygen (LOX) unit that provides oxygen for the
gasification and reforming processes, as well as nitrogen for ancillary equipment. The ASU is
designed to produce 95 mole percent O2 for use in the gasifier and Claus plant in the coal cases
and for use in the reformer in the natural gas case. The air compressor is powered by an electric
motor. Nitrogen is recovered and used as a diluent for coal drying in the coal cases and vented in
the natural gas case.4
The ASU process for the coal fed cases is shown in Exhibit 3-11 with the gasification, quench,
and dry solid removal processes. Cases 1 and 2 share a common PFD. The mass balances of
this process for the two cases are presented by Exhibit 3-12. Since Case 2 uses the same
specifications as Case 1, they both share a common mass balance in the exhibit. The stream
numbers on the PFD correspond to the stream numbers in the mass balance tables. The ASU for

4
In the natural gas cases, no disposition was assigned to the nitrogen from the ASU and no potential credit from its
sale was applied to the process economics.

20
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

the natural gas case was not modeled, but the performance was estimated from similar ASU
systems.

3.3.3 Coal Gasification Syngas Process Description

Cases 1 and 2 use coal gasification as the initial processing step. The gasifier block utilizes coal,
oxygen, and steam to produce raw syngas. The following units in this subsection are included in
this block.
[Link] Coal Milling, Grinding, and Drying
The coal drying PFD is shown in Exhibit 3-9. Case 1 and Case 2 share a common PFD. The
mass balances of the coal drying process are presented in Exhibit 3-10. Since Case 2 uses the
same specifications as Case 1, they both share a common mass balance in the exhibit. The
stream numbers on the PFD correspond to the stream numbers in the mass balance tables.
The Shell process uses a dry feed system that is sensitive to the coal moisture content. Coal
moisture consists of two parts: surface moisture and inherent moisture. For coal to flow
smoothly through the lock hoppers, the surface moisture must be removed. The PRB coal used
in this study contains 25.77 percent total moisture on an as-received basis. It was assumed that
the coal must be dried to 6 percent moisture to allow for smooth flow through the dry feed
system. The coal is simultaneously crushed and dried in the coal mill, then delivered to a surge
hopper.
The drying heat is provided by burning the tail-gas from the Claus plant and the flash and purge
gas from the methanol synthesis process in an incinerator. The hot incinerator flue gas mixes
with N2 from the ASU and exhaust is recycled from the mill to maintain a drying gas
temperature of less than 500°F with oxygen content lower than 8 vol%. The dried coal is drawn
from the surge hoppers and fed through a pressurization lock hopper system to a dense-phase
pneumatic conveyor, which uses CO2 to convey the coal to the gasifier. Using CO2 rather than
N2 as the transport gas has the benefit that CO2 is removed in the downstream acid gas removal
(Rectisol) process, minimizing the buildup of inert species in the methanol generation recycle
loop, thus reducing the size of the equipment needed. For this study, it was assumed that there
was no impact of hot, concentrated CO2 in the presence of moisture on standard materials of
construction.
[Link] Gasification, Gas Quench, and Water Quench
The gasification and quench processes for the coal fed cases are shown in Exhibit 3-11. Cases 1
and 2 share a common PFD. The mass balances of this process for the two cases are presented
by Exhibit 3-12. Since Case 2 uses the same specifications as Case 1, they both share a common
mass balance in the exhibit. The stream numbers on the PFD correspond to the stream numbers
in the mass balance tables.
Syngas is generated from the gasification of PRB coal in a high-pressure, oxygen-blown Shell
quench-type gasifier. The high temperature entrained-bed gasifier uses a partial water quench
and syngas cooler to cool the hot syngas stream and generate steam for the water gas shift
reactors and power generation.
The coal feedstock is gasified in the presence of O2 and superheated process steam. The O2
requirement (O2 required/dried feedstock) depends on the moisture content of the dried feedstock
feeding the Shell gasifier. The coal is gasified at 2,550°F and 650 psia in a membrane wall

21
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

reactor installed inside a pressure vessel, forming syngas, fly ash, and slag. The reactor design
includes entrained flow, high temperature, recycled ash particulates, and slagging gasification
and achieves carbon conversion greater than 99 percent.
The syngas leaving the gasifier is quenched to 850°F before entering a cyclone system for initial
particulate removal described in the next section. The majority of the slag leaves the gasifier via
the bottom as molten slag and is quenched and scattered to small glassy granulates in the slag
(water) bath. In addition to the syngas and slag, the gasifier produces medium pressure saturated
steam. Steam is produced from water that is circulated over the membrane wall of the gasifier to
remove the heat of reaction and maintain an operating temperature of 2,550°F in the gasifier.
For this study, the design size requires eight operating trains with one spare train for a total of
nine gasifiers. The facility contains one spare gasifier train to allow operation at a 90 percent
capacity factor and to generally improve availability. The spare gasifier train feeds into the same
gas clean-up trains as the other gasifier trains so that start-up/operation is transparent to
downstream processes. The gasifier costs were scaled from previous studies which assumed two
trains plus one spare train to achieve a high availability. [6,7,15]
[Link] Dry Solids Removal and Wet Scrubbing
The dry solid removal processes are shown in Exhibit 3-11 with the gasification and quench
processes. Cases 1 and 2 share a common PFD. The mass balances of this process for the two
cases are presented by Exhibit 3-12. Since Case 2 uses the same specifications as Case 1, they
both share a common mass balance in the exhibit. The stream numbers on the PFD correspond
to the stream numbers in the mass balance tables.
After passing through the water quench system, the syngas passes through a cyclone and a raw
gas candle filter where a majority of the fine particles are removed and returned to the gasifier
with the coal feedstock. Fines produced by the gasification system are recirculated to extinction.
Final dust removal is achieved in the wet scrubbing section, to lower the dust content of the
syngas to <1 mg/Nm³, and to lower its halide content to <1 ppmv. The wet scrubbing system
consists of a Venturi scrubber followed by a packed bed wash column. A three percent by
weight slurry bleed is fed to the primary wastewater treatment. Syngas is water saturated and
leaves the wet scrubbing system at a temperature of 425°F.
[Link] Water Gas Shift
The water gas shift process is shown in Exhibit 3-13, where both coal cases share a common
PFD. The material balances for the two cases are presented in Exhibit 3-14. Since Case 2 uses
the same specifications as Case 1, they both share a common mass balance in the exhibit. The
stream numbers on the PFD correspond to the stream numbers in the mass balance tables.
Coal-derived syngas from the wet scrubber enters the sour shift and cooling section. In order to
achieve a 2:1 ratio of H2 to CO in the final syngas, approximately 55 to 60 percent of the coal-
derived syngas is shifted. The syngas to be shifted is heated in a countercurrent exchanger by the
effluent of the first shift reactor to a temperature of 530°F. This syngas passes through the first
stage shift reactor where the shift reaction exothermically converts CO and H2O into H2 and
CO2, leading to an outlet syngas temperature of 940°F. The syngas is then cooled to 495°F by a
heat recovery steam generating exchanger followed by the counter current exchanger with the
first stage feed stream.

22
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

The syngas/steam mixture passes through the second stage shift reactor where the shift reaction
converts additional CO and H2O into H2 and CO2, with a resulting second-stage shift reactor
outlet syngas temperature of approximately 600°F. After cooling, the shifted syngas from the
second-stage shift reactor outlet mixes with the bypass syngas and is sent to low-temperature gas
cooling before being sent to the downstream Rectisol unit for removal of sulfur and CO2.
[Link] Low-Temperature Gas Cooling
The low-temperature gas cooling process is shown in Exhibit 3-15 where both coal cases share a
common PFD. The material balance for this process is presented in Exhibit 3-16. Since Case 2
uses the same specifications as Case 1, they both share a common mass balance in the exhibit.
The stream numbers on the PFD correspond to the stream numbers in the mass balance tables.
Syngas is cooled in a number of steps to recover heat at useful temperatures. As the shifted
syngas is cooled, process condensate, feed water, and a mix of clarified water and raw water are
being heated.
The condensate from the air cooler and trim cooler knock-out drums absorbs nearly all of the
NH3 from the syngas. This condensate is mixed and sent to the process condensate stripper
where low pressure steam is used to strip NH3 and other absorbed gases from the condensate.
The stripped gases are sent to the sulfur recovery unit to be treated with other sour gas streams.
The stripped condensate mixes with process condensate separated from the syngas. The mixed
temperature is 325 °F. The process condensate is then pumped and heated to 390°F before being
fed into the wet scrubbers.
[Link] Mercury Removal
The mercury removal process is shown in Exhibit 3-15 where both coal cases share a common
PFD. The material balance for this process is presented by Exhibit 3-16. Since Case 2 uses the
same specifications as Case 1, they both share a common mass balance in the exhibit. The
stream numbers on the PFD correspond to the stream numbers in the mass balance tables.
Mercury removal is achieved by a packed bed of sulfur-impregnated activated carbon. The low-
temperature syngas must be heated to 105°F prior to feeding it to the mercury-removal bed. The
packed carbon bed vessels located upstream of the sulfur recovery unit with 20-second
superficial gas residence time would achieve more than 90 percent removal of mercury (based
on mercury content in the gasifier feedstock) in addition to removal of some portion of other
volatile heavy metals such as arsenic. Mercury-removal systems using sulfur-impregnated
activated carbon downstream of a coal gasifier have a reported bed life of 18 to 24 months, and
usually replacement is required due to fouling of the bed rather than mercury saturation.
[Link] Acid Gas Removal and CO2 Compression
The acid gas removal and CO2 compression processes are shown in Exhibit 3-17, where Case 1
and Case 2 are shown in separate PFDs. Exhibit 3-19 represents the material balances of this
process for the cases. Case 1 and Case 2 are shown in separate tables, as the recovered CO2 in
Case 1 is not compressed and sequestered. The stream numbers on the PFD correspond to the
stream numbers in the mass balance tables.
A feature of this plant configuration is that H2S and CO2 are removed within the same process,
via the Rectisol unit. The Rectisol acid gas removal (AGR) process was specified primarily
because the methanol synthesis catalyst requires an H2S level below 100 ppbv in order to

23
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

maintain an adequate catalyst lifetime.

The Rectisol process uses chilled methanol as a solvent. Because of high vapor pressure of
methanol, the process is operated at a temperature in the range of -30 to -100 °F. There are many
possible process configurations for the Rectisol process depending on process requirements,
product specifications, and scalability. In this study, the methanol solvent contacting the feed
gas in the first stage of the absorber is stripped in two stages of flashing via pressure reduction.
The acid gas leaving the first stage solvent regenerator is suitable for processing in a Claus plant.
The regenerated solvent is virtually free of sulfur compounds but contains some CO2. The
second stage of absorption then removes the remaining CO2 present. The rich solvent from the
bottom of the second stage of the absorber is stripped in a steam-heated regenerator and returned
to the top of the absorption column after cooling and refrigeration.
In Case 1, sufficient CO2 for use in transporting the coal is compressed as needed; the remaining
recovered CO2 is vented. In Case 2, the low-pressure CO2 stream recovered from the Rectisol
unit is compressed to 2,200 psig in a multiple-stage, intercooled compressor to supercritical
conditions, which is then ready for pipeline transport.
[Link] Sulfur Recovery Unit
The sulfur recovery unit is shown in Exhibit 3-18, where both coal cases share a common PFD.
Exhibit 3-19 represents the material balances. Case 1 and Case 2 material balances are shown
separately. The stream numbers on the PFD correspond to the stream numbers in the mass
balance tables.
The purpose of the sulfur recovery unit is to treat the acid gas from the Rectisol unit and sour gas
streams from the sour water strippers to make an effluent gas acceptable for venting to the
atmosphere or burning.
Currently, the Claus process remains the mainstay for sulfur recovery. Conventional three-stage
Claus plants, with indirect reheat and feeds with a high H2S content, can approach greater than
98 percent sulfur recovery.
The Claus process converts H2S to elemental sulfur via the following reactions:
H2S + 3/2 O2  H2O + SO2
2H2S + SO2  2H2O + 3S
The second reaction, the Claus reaction, is equilibrium limited. The overall reaction is:
3H2S + 3/2 O2  3H2O + 3S
The sulfur in the vapor phase exists as S2, S6, and S8 molecular species, with the S2 predominant
at higher temperatures, and S8 predominant at lower temperatures.
In this process, one-third of the H2S is burned in the furnace with oxygen from the ASU to give
sufficient SO2 to react with the remaining H2S. Since these reactions are highly exothermic, a
waste heat boiler that recovers high-pressure steam follows the furnace. Sulfur is recovered in a
condenser that follows the high-pressure steam recovery section. Low-pressure steam is raised
in the condenser. The tail gas from the first condenser then goes to three catalytic conversion
stages, where the remaining sulfur is recovered via the Claus reaction. Each catalytic stage
consists of gas preheat, a catalytic reactor, and a sulfur condenser. The liquid sulfur goes to the
sulfur pit, while the tail gas proceeds to the incinerator for coal drying.

24
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

3.3.4 Natural Gas / Steam Reforming

In case 3, a methane reformer is used to convert natural gas to a syngas suitable for methanol
synthesis. Natural gas is combined with oxygen in the autothermal reformer (ATR). The ATR
represents a process intensification of syngas production where partial oxidation of the feedstock
provides the energy to drive the endothermic reforming of the feedstock to syngas. The
reforming is accomplished through contacting the reaction mixture with a nickel supported on
alumina catalyst. The ATR is fed 95 percent pure oxygen from the ASU; a purified oxygen feed
was chosen to minimize the amount of inert gases introduced into the methanol synthesis loop.
The ATR operates at 355.3 psia and 1,935ºF (24.5 bar and 1,057°C). Steam and oxygen feeds
were adjusted to the reformer to obtain a H2/CO ratio of approximately 2/1 and to provide
enough steam to mitigate the risk of excessive coking. The reformed syngas is cooled to recover
heat at a useful temperature. As the syngas is cooled, process condensate, feed water, and raw
water are being heated. For this study, it was assumed that no additional cleanup of the syngas
was necessary before the production of crude methanol. Sulfur polishing and other cleanup
processes may be required in a more detailed design, but they were considered beyond the scope
and accuracy of this study.

3.3.5 Methanol Reactor and Synthesis Loop - All Cases

The Methanol Synthesis Loop PFD is shown in Exhibit 3-22, where all the cases share a
common PFD and the material balances for the cases are shown in Exhibit 3-23. Since Case 2
uses the same specifications as Case 1, they both share a common mass balance in the exhibit
while the natural gas-case balance is shown on the second page. The stream numbers on the
PFD correspond to the stream numbers in the mass balance tables.
There are two routes for the production of methanol: vapor phase and liquid phase. A vapor-
phase methanol process was chosen over a liquid-phase methanol process due to the breadth of
operating experience with vapor-phase production units and the lack of commercial operating
experience with liquid-phase methanol production. [16] However, the advent of mega- methanol
projects in stranded gas fields may rapidly provide the experience curve to justify revisiting this
design choice.
The methanol reactor converts hydrogen and carbon monoxide to methanol. The reactor is a
catalytic packed-bed reactor. The primary side reactions produce ethanol, propanol, and
formaldehyde. Acetone and acetaldehyde are also common impurities in the methanol product
and are captured in this analysis.
CO2-lean syngas with a H2/CO ratio of 2:1 from the AGR process or from the natural gas
reformer is compressed from 490 psia to the synthesis loop operating pressure of 755 psia in the
syngas compressor. The compressed syngas is mixed with the recycled gas, heated to 400ºF, and
routed to the methanol reactor. The reactor is steam cooled to facilitate near isothermal
operation at 475ºF and 735 psia. In-line blowers, coolers, and knock-out drums are used within
the synthesis loop to maintain pressure and remove crude methanol.
Because the methanol synthesis reaction is equilibrium limited, in order to promote continued
production of products, methanol reactor effluent is cooled to condense out the product crude
methanol that is removed in a phase separator. Ninety-six percent of the separated gas is
compressed to reactor pressure and readmitted along with fresh syngas to the methanol reactor.
This recycling elevates the overall conversion of carbon, overcoming the low per-pass

25
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

conversion of CO (60 percent). A small purge-gas stream (approximately four percent) is taken
to limit the build-up of inert gas species. In the coal cases, the exhaust gas is burned in the coal-
drying process where some heat is recovered as steam for power generation. In the natural gas
case the exhaust gas is combusted in the combustion turbine for power generation.

3.3.6 Heat Recovery and Power Generation

The power cycle heat and material balance diagrams for all cases are shown in Exhibit 3-24.
Both the gasification and the methanol synthesis processes generate a large amount of heat that
can be recovered. The recovered heat is used to generate steam for process requirements and
power generation. The process steam is generated at three different pressure levels. Additional
power is generated by adding a small (50 to 100 MW) gas turbine for combined cycle power
generation in each of the cases. The gas turbine in the natural gas case is fed process tail gases
only; but the coal cases, which use the tail cases for coal drying, are fed natural gas. The total
power generated is designed to equal the total estimated auxiliary loads for the coal fed cases 1
and 2. Excess power is generated from the process heat recovered and tail gas combustion in the
natural gas case. No additional natural gas is consumed in the power cycle for the natural gas
case. The model performance results are discussed above in section 3.2.

3.3.7 Water Balance

Water required for the operation of the facility is obtained from a source such as a lake, river, or
well. If the quality of the water is adequate, raw water is used directly as makeup to the cooling
tower and the gasifier quench. To meet the rest of the plant’s water needs, makeup must be
treated first by filtration to create service-quality water. This quality of water serves as makeup
to the plant’s potable water, demineralized water, fire water, and service water systems. Higher
quality boiler feedwater is treated by a typical reverse osmosis and electrodeionization package.
Water rejected by the system is of an acceptable quality to be used as makeup to the cooling
tower.
In addition to meeting the makeup water needs of the facility, water treatment systems must be
capable of capturing and treating on-site waste streams. Wastewater created by the gasification
process must pass through a number of pretreatment steps before being combined with other
wastewater streams. Metals, ammonia, and suspended solids are removed from the stream
through the use of a clarifier and a biological treatment unit. Once processed, the wastewater can
be combined with the cooling tower blowdown as well as other plant waste streams in a final
clarifier. Dechlorination and pH adjustment are performed as needed at this step of the process
in order to meet all local discharge regulations. Solids separated out in this process are dried by
means of a filter press and taken away for offsite disposal.
Exhibit 3-25 shows the water balances for the coal cases. Since Case 2 uses the same
specifications as Case 1, they both share a common mass balance in the exhibit. The water usage
for the natural gas case was not modeled, but the water consumption and cooling requirements
were estimated from similar systems.

26
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-9 Coal drying process flow diagram

Case 1 and Case 2

27
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-10 Mass balance of coal drying process

Case 1 and Case 2 – coal drying

STREAM 100 101 102 103 104 105 106

Description Wet Coal Ambient Air Feed Air Dry Coal Exhaust Gas LP Recycle Gas HP Recycle Gas
Mole Flow (Vapor/Liquid) lbmol/hr
AR 0 139 139 0 418 147 147
CH4 0 11,711 11,711 0 122,651 43,094 43,093
CO 0 3,143 3,143 0 462 162 162
CO2 0 0 0 0 0 0 0
H2S 0 0 0 0 4,586 1,611 1,611
COS 0 0 0 0 0 0 0
HCN 0 7 7 0 22,890 8,043 8,042
H2 0 0 0 0 0 0 0
H2O 0 0 0 0 0 0 0
N2 0 0 0 0 1 0 0
NH3 0 0 0 0 0 0 0
SO2 0 0 0 0 5 2 2

Mass Flow (solids) lb/hr

COAL 1,618,190 1,277,850

Total Flow lbmol/hr 0 15,000 15,000 0 151,013 53,059 53,058

Total Flow lb/hr 1,618,190 434,322 434,322 1,277,850 4,081,910 1,434,180 1,434,160
Total Flow ACFH 0 5,679,650 5,200,550 0 67,445,300 23,697,000 22,769,000
Temperature °F 59.00 59.00 89.56 157.00 164.60 164.60 180.15
Pressure psia 14.70 14.70 17.00 15.00 15.00 15.00 16.00
Density lb/ft³ 0.00 0.08 0.08 0.00 0.06 0.06 0.06
Average MW lb/lbmol 0.00 28.95 28.95 0.00 27.03 27.03 27.03

28
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-11 Shell gasification process flow diagram

Case 1 and Case 2

29
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-12 Mass balance of gasification process

Case 1 and Case 2
STREAM 201 202 203 204 205 209 212 213 214 215
Cold Quench Hot Quench
Description ASU Air Hot O2 Claus O2 Coal Drying N2 Gasifier CO2 Raw Syngas Slag Dry Solids
Water Water
Mole Flow (Vapor/Liquid) lbmol/hr
AR 1,332 938 5 0 0 1,580 0 0 0 0
CH4 0 0 0 0 0 10 0 0 0 0
CO 0 0 0 0 37 111,095 0 0 0 0
CO2 47 0 0 0 5,564 11,503 0 0 0 0
H2S 0 0 0 0 0 571 0 0 0 0
COS 0 0 0 0 0 51 0 0 0 0
HCN 0 0 0 0 0 2 0 0 0 0
H2 0 0 0 0 10 41,343 0 0 0 0
H2O 1,422 0 0 0 0 150,261 61,508 61,508 0 0
N2 111,363 626 3 110,661 0 1,743 0 0 0 0
NH3 0 0 0 0 0 16 0 0 0 0
O2 29,874 29,714 151 0 0 0 0 0 0 0
SO2 0 0 0 0 0 0 0 0 0 0

Mass Flow (solids) lb/hr

ASH 0 0 0 0 0 0 0 0 0 26,506
SLAG 0 0 0 0 0 0 0 0 84,949 0

Total Flow lbmol/hr 144,038 31,278 159 110,661 5,611 318,181 61,508 61,508 0 0
Total Flow lb/hr 4,156,505 1,005,840 5,128 3,100,000 245,922 6,543,540 1,108,080 1,108,080 84,949 26,506
Total Flow ACFH 54,498,694 244,402 61,865 34,944,900 51,612 5,882,680 17,725 20,469 0 0
Temperature °F 59 300.00 72.14 70.00 269.76 603.32 59.00 392.00 2,650.00 612.32
Pressure psia 14.70 710.88 14.70 18.00 768.89 605.34 700.00 685.00 650.00 630.00
Density lb/ft³ 0.08 4.12 0.08 0.09 4.76 1.11 62.52 54.13 0.00 0.00
Average MW lb/lbmol 28.86 32.16 32.16 28.01 43.83 20.57 18.02 18.02 0.00 0.00

30
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-13 CO shift reaction process flow diagram

Case 1 and Case 2

31
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-14 Mass balance of shift reaction process

Case 1 and Case 2
STREAM 303 304 305 306 307 308 309 311 312 313 314 315 316 317 318
Syngas to Bypass Hot Syngas Hot 1st Shift Warm 1st Cold 1st Shift Hot 2nd Shift Scrubber Scrubber Hot Scrubber Scrubber LP Recycle HP Recycle Bottoms to Recycle
Description
Shift Syngas to Shift Syngas Shift Syngas Syngas Syngas Water Vapor Cold Vapor Sour Gas Water Water WWT Syngas
Mole Flow (Vapor/Liquid) lbmol/hr
AR 573 366 573 573 573 573 573 0 0 0 0 0 0 0 642
CH4 4 2 4 4 4 4 4 0 0 0 0 0 0 0 4
CO 40,254 25,721 40,254 12,003 12,003 12,003 4,457 9 9 9 9 0 0 0 45,111
CO2 4,192 2,679 4,192 32,460 32,460 32,460 40,007 5 5 5 0 0 0 0 4,698
H2S 208 133 208 225 225 225 226 1 1 1 0 0 0 0 233
COS 18 12 18 2 2 2 0 0 0 0 0 0 0 0 21
HCN 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1
H2 14,984 9,575 14,984 43,236 43,236 43,236 50,782 5 5 5 5 0 0 0 16,793
H2O 65,562 41,892 65,562 37,293 37,293 37,293 29,745 62,790 9,511 9,511 1 9,502 9,502 53,279 73,473
N2 632 404 632 632 632 632 632 0 0 0 0 0 0 0 709
NH3 13 8 13 14 14 14 14 1 0 0 0 0 0 0 14
O2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
SO2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Mass Flow (solids) lb/hr

ASH 0 0 0 0 0 0 0 8,985 0 0 0 0 0 8,985 0

Total Flow lbmol/hr 126,440 80,792 126,440 126,440 126,440 126,440 126,440 62,818 9,531 9,531 24 9,502 9,502 53,288 141,699
Total Flow lb/hr 2,572,400 1,643,710 2,572,400 2,572,400 2,572,400 2,572,400 2,572,400 1,140,895 171,837 171,837 651 171,186 171,186 969,056 2,882,840
Total Flow ACFH 1,863,100 1,190,480 2,163,830 3,206,240 2,436,760 2,211,220 2,532,320 21,323 1,465,660 5,299 3,003 2,781 2,777 16,591 2,087,930
Temperature °F 415.31 415.31 530.00 938.81 600.00 495.16 606.40 415.31 281.93 130.00 130.00 130.00 130.96 281.93 415.31
Pressure psia 605.34 605.34 600.34 593.09 584.39 575.69 567.69 605.34 50.76 50.76 50.76 50.76 550.00 50.76 605.34
Density lb/ft³ 1.38 1.38 1.19 0.80 1.06 1.16 1.02 53.51 0.12 32.43 0.22 61.56 61.64 58.41 1.38
Average MW lb/lbmol 20.34 20.34 20.34 20.34 20.34 20.34 20.34 0.00 18.03 18.03 26.60 18.02 18.02 0.00 1.00

32
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-15 Low temperature gas cooling process flow diagram

Case 1 and Case 2

33
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-16 Mass balance of low temperature gas cooling

Case 1 and Case 2
STREAM 401 402 403 404 405 406 407 408 409
Description Shifted Syngas Shifted Syngas Shifted Syngas Shifted Syngas Shifted Syngas Shifted Syngas Shifted Syngas Shifted Syngas Shifted Syngas
Mole Flow (Vapor/Liquid) lbmol/hr
AR 573 573 573 938 938 938 938 938 938
CH4 4 4 4 6 6 6 6 6 6
CO 4,457 4,457 4,457 30,178 30,178 30,177 30,177 30,175 30,173
CO2 40,007 40,007 40,007 42,686 42,686 42,671 42,667 42,640 42,568
H2S 226 226 226 359 359 358 358 358 356
COS 0 0 0 12 12 12 12 12 12
HCN 0 0 0 1 1 1 1 1 0
H2 50,782 50,782 50,782 60,356 60,356 60,352 60,352 60,347 60,342
H2O 29,745 29,745 29,745 71,637 71,637 50,570 50,566 24,073 313
N2 632 632 632 1,037 1,037 1,037 1,037 1,036 1,036
NH3 14 14 14 22 21 20 16 15 0
O2 0 0 0 0 0 0 0 0 0
SO2 0 0 0 0 0 0 0 0 0

Total Flow lbmol/hr 126,440 126,440 126,440 207,232 207,232 186,142 186,138 159,600 135,745
Total Flow lb/hr 2,572,400 2,572,400 2,572,400 4,216,110 4,216,110 3,835,830 3,835,830 3,356,910 2,925,330
Total Flow ACFH 2,376,400 2,277,470 2,087,460 3,389,870 3,172,460 2,904,840 2,401,550 2,393,160 1,569,710
Temperature °F 536.00 489.29 409.06 406.45 366.96 350.00 305.78 305.78 110.63
Pressure psia 562.69 557.69 552.69 552.69 549.69 543.24 540.34 540.34 515.83
Density lb/ft³ 1.08 1.13 1.23 1.24 1.33 1.32 1.60 1.40 1.86
Average MW lb/lbmol 20.34 20.34 20.34 20.34 20.34 20.61 20.61 21.03 21.55

STREAM 410 411 412 413 414 415 416 418 419
Knock Out Sour Stripper Sour Stripper Sour Stripper Cold Hot Condensate
Description Sour Water Sour Flash Gas Sour Gas
Water Feed Gas Bottoms Condensate to Scrubber
Mole Flow (Vapor/Liquid) lbmol/hr
AR 0 0 0 0 0 0 0 0 0
CH4 0 0 0 0 0 0 0 0 0
CO 3 2 0 2 2 2 0 3 3
CO2 41 57 0 57 57 57 0 46 55
H2S 1 2 0 2 0 0 1 2 2
COS 0 0 0 0 0 0 0 0 0
HCN 0 0 0 0 0 0 0 0 0
H2 10 5 0 5 5 5 0 10 10
H2O 47,560 23,745 0 23,745 216 216 23,529 80,595 80,604
N2 0 0 0 0 0 0 0 0 0
NH3 2 0 0 0 0 0 0 6 15
O2 0 0 0 0 0 0 0 0 0
SO2 0 0 0 0 0 0 0 0 0

Total Flow lbmol/hr 47,627 23,840 0 23,840 280 280 23,560 80,694 80,703
Total Flow lb/hr 859,195 431,577 7 431,569 6,472 6,480 425,097 1,455,480 1,455,480
Total Flow ACFH 15,248 7,160 4 7,156 35,539 35,579 7,445 25,365 26,938
Temperature °F 327.11 178.95 178.95 178.95 276.97 276.97 307.02 299.48 392.00
Pressure psia 540.34 524.53 524.53 524.53 61.11 61.11 74.16 768.89 761.64
Density lb/ft³ 56.35 60.28 1.71 60.31 0.18 0.18 57.10 57.38 54.03
Average MW lb/lbmol 18.04 18.10 22.12 18.10 23.12 23.11 18.04 18.04 18.04

34
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-17 Rectisol process flow diagram

Case 1

35
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-17 Rectisol process flow diagram (continued)

Case 2

36
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-18 Claus process flow diagram

Case 1 and Case 2

37
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-19 Mass balance of Rectisol and Claus processes

Case 1
STREAM 500 501 502 503 504 505 506 601 602
Cold Sweet Hot Sweet Acid Gas to Sulfur Tail Gas to
Description LP CO2 IP CO2 KO Water CO2 Vent
Syngas Syngas Claus Product Coal Drying
Mole Flow (Vapor/Liquid) lbmol/hr
AR 938 938 0 0 0 0 0 0 5
CH4 6 6 0 0 0 0 0 0 0
CO 29,920 29,920 251 37 0 1 215 0 65
CO2 3,443 3,443 38,219 5,564 0 906 32,655 0 925
H2S 0 0 0 0 0 356 0 0 4
COS 0 0 0 0 0 12 0 0 1
HCN 0 0 0 0 0 0 0 0 0
H2 60,270 60,270 71 10 0 1 60 0 23
H2O 298 298 0 0 0 16 0 0 582
N2 1,036 1,036 0 0 0 0 0 0 4
NH3 0 0 0 0 0 0 0 0 0
O2 0 0 0 0 0 0 0 0 0
SO2 0 0 0 0 0 0 0 0 2

Mass Flow (solids) lb/hr

Sulfur 0 0 0 0 0 0 0 11,576 0

Total Flow lbmol/hr 95,912 95,912 38,541 5,611 0 1,292 32,930 45 1,611
Total Flow lb/hr 1,183,080 1,183,080 1,689,200 245,922 0 53,049 1,443,280 11,576 53,731
Total Flow ACFH 1,096,130 1,225,740 14,650,000 51,483 0 257,856 12,517,700 35 671,652
Temperature °F 68.00 125.00 57.20 269.76 100 86.00 56.88 387.64 320.00
Pressure psia 495.83 493.83 14.50 769.00 15 29.01 14.50 20.01 20.01
Density lb/ft³ 1.08 0.97 0.12 4.78 61 0.21 0.12 327.05 0.08
Average MW lb/lbmol 12.34 12.34 43.83 43.83 18 41.06 43.83 256.53 33.34

38
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-19 Mass balance of Rectisol and Claus processes (continued)

Case 2
STREAM 500 501 502 503 504 505 506 601 602
Cold Sweet Hot Sweet Knock Out Acid Gas to Sulfur Tail Gas to
Description LP CO2 HP CO2 IP CO2
Syngas Syngas Water Claus Product Coal Drying
Mole Flow (Vapor/Liquid) lbmol/hr
AR 938 938 0 0 0 0 0 0 5
CH4 6 6 0 0 0 0 0 0 0
CO 29,920 29,920 251 215 0 1 37 0 65
CO2 3,443 3,443 38,219 32,655 0 906 5,564 0 925
H2S 0 0 0 0 0 356 0 0 4
COS 0 0 0 0 0 12 0 0 1
HCN 0 0 0 0 0 0 0 0 0
H2 60,270 60,270 71 60 0 1 10 0 23
H2O 298 298 0 0 0 16 0 0 582
N2 1,036 1,036 0 0 0 0 0 0 4
O2 0 0 0 0 0 0 0 0 0
SO2 0 0 0 0 0 0 0 0 2

Mass Flow (solids) lb/hr

Sulfur 0 0 0 0 0 0 0 11,576 0

Total Flow lbmol/hr 95,912 95,912 38,541 32,930 0 1,292 5,611 45 1,611
Total Flow lb/hr 1,183,080 1,183,080 1,689,200 1,443,280 1 53,049 245,922 11,576 53,731
Total Flow ACFH 1,096,130 1,225,740 14,650,000 52,523 0 257,856 51,483 35 671,652
Temperature °F 68.00 125.00 57.20 166.80 100 86.00 269.76 387.64 320.00
Pressure psia 495.83 493.83 14.50 2,214.70 15 29.01 769.00 20.01 20.01
Density lb/ft³ 1.08 0.97 0.12 27.48 61 0.21 4.78 327.05 0.08
Average MW lb/lbmol 12.34 12.34 43.83 43.83 18 41.06 43.83 256.53 33.34

39
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-20 Natural gas reforming process flow diagram

Case 3

40
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-21 Mass balance of natural gas reforming

Case 3
STREAM - 2 3 4 5 6 7 8 9 10 11
Natural Gas Warm Natural Reformer
Description ASU Air O2 H2O Feed H2O Steam Reformer Exit Condensate Raw Syngas
Feed Gas Feed Feed
Mole Flow (Vapor/Liquid) lbmol/hr
AR 905 0 0 0 0 0 0 0 0 0 0
CH4 0 0 31,361 31,361 0 0 0 31,361 1,301 0 1,301
CO 0 0 0 0 0 0 0 0 30,758 0 30,758
CO2 0 0 337 337 0 0 0 337 3,041 0 3,041
C2H6 0 0 1,078 1,078 0 0 0 1,078 0 0 0
C3H8 0 0 236 236 0 0 0 236 0 0 0
N-C4H10 0 0 135 135 0 0 0 135 0 0 0
H2 0 0 0 0 0 0 0 0 60,356 0 60,356
H2O 44 0 0 0 7,258 7,258 7,258 7,258 11,873 11,873 0
N2 75,990 1,073 539 539 0 0 0 1,612 1,612 0 1,612
O2 20,391 20,391 0 0 0 0 0 20,391 0 0 0

Total Flow lbmol/hr 97,330 21,464 33,685 33,685 7,258 7,258 7,258 62,407 108,941 11,873 97,068
Total Flow lb/hr 2,818,166 682,554 583,677 583,677 130,751 130,751 130,751 1,396,980 1,396,980 213,898 1,183,080
Total Flow ACFH 36,853,318 469,137 421,602 1,900,690 2,089 2,089 405,066 3,088,390 7,908,740 3,437 7,972,290
Temperature °F 59 305 100 1,500 59 59 1,500 1,261 1,935 70 494
Pressure psia 14.70 375.00 450.00 375.00 14.70 375.00 375.00 375.00 355.34 14.70 125.00
Density lb/ft³ 0.08 1.45 1.38 0.31 62.59 62.59 0.32 0.45 0.18 62.23 0.15
Average MW lb/lbmol 28.95 31.80 17.33 17.33 18.02 18.02 18.02 22.38 12.82 18.02 12.19

41
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-22 Methanol synthesis process flow diagram

Case 1, Case 2, and Case 3

42
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-23 Mass balance of methanol synthesis

Case 1 and Case 2
STREAM 701 702 703 704 705 706 707 708 709 710 711 712 713
HP Sweet Cold Mixed Warm Mixed Hot Mixed Stage 1 Stage 2 Hot Stage 2 Warm Stage 2 Cool Stage 2 LP Recycle HP Recycle
Description N/A Flash Gas
Syngas Feed Feed Feed Product Cooled Feed Product Product Product Gas Gas
Mole Flow (Vapor/Liquid) lbmol/hr
AR 938 20,449 20,449 20,449 20,449 20,449 20,449 20,449 20,449 20,324 19,511 19,511
N2 1,036 23,453 23,453 23,453 23,453 23,453 23,453 23,453 23,453 23,350 22,416 22,416
CO 29,920 50,718 50,718 50,718 31,099 31,099 21,712 21,712 21,712 21,666 20,798 20,798
CO2 3,443 36,311 36,311 36,311 35,856 35,856 36,130 36,130 36,130 34,237 32,867 32,867
H2 60,270 100,585 100,585 100,585 59,984 59,984 42,030 42,030 42,030 41,994 40,315 40,315
H2O 298 314 314 314 777 777 513 513 513 17 16 16
CH4 6 119 119 119 119 119 119 119 119 118 113 113
CH3OH 0 2,757 2,757 2,757 22,814 22,814 31,912 31,912 31,912 2,872 2,757 2,757
C2H6O 0 35 35 35 41 41 47 47 47 36 35 35
C3H8O 0 0 0 0 2 2 3 3 3 0 0 0

Total Flow lbmol/hr 95,912 234,742 234,742 234,742 194,595 194,595 176,367 176,367 176,367 144,616 138,830 138,830
Total Flow lb/hr 1,183,090 4,792,870 4,792,870 4,792,870 4,792,870 4,792,870 4,792,870 4,792,870 4,792,870 3,760,250 3,609,780 3,609,780
Total Flow ACFH 957,495 2,118,840 3,059,710 2,940,930 2,659,350 2,449,880 2,291,550 1,638,940 1,638,940 1,246,230 1,196,360 1,160,650
Temperature °F 228.60 173.42 437.73 400.00 475.00 400.00 430.00 230.00 130.00 130.00 130.00 141.50
Pressure psia 755.00 755.00 750.00 747.00 737.00 732.00 727.00 722.00 720.00 717.00 717.00 755.00
Density lb/ft³ 1.24 2.26 1.57 1.63 1.80 1.96 2.09 2.92 2.92 3.02 3.02 3.11
Average MW lb/lbmol 12.34 20.42 20.42 20.42 24.63 24.63 27.18 27.18 27.18 26.00 26.00 26.00

STREAM 714 715 716 718 720 722 724 725 726 727 728 729 730
Methanol Purge Gas to
Description Raw Methanol PSA Feed Raw Methanol N/A N/A N/A N/A N/A Purge Gas N/A Stack Gas
Flash Gas Coal Drying
Mole Flow (Vapor/Liquid) lbmol/hr
AR 125 813 2 0 0 0 123 0 0 665 148 0 704
N2 102 934 1 0 0 0 101 0 0 764 170 0 4,041
CO 45 867 0 0 0 0 45 0 0 709 158 0 0
CO2 1,893 1,369 343 0 0 0 1,550 0 0 1,120 249 0 1,930
H2 36 1,680 0 0 0 0 36 0 0 481 107 0 0
H2O 496 1 493 0 0 0 2 0 0 1 0 0 683
CH4 1 5 0 0 0 0 1 0 0 4 1 0 0
CH3OH 29,039 115 28,626 0 0 0 413 0 0 94 21 0 0
C2H6O 11 1 6 0 0 0 4 0 0 1 0 0 0
C3H8O 3 0 3 0 0 0 0 0 0 0 0 0 0

Total Flow lbmol/hr 31,752 5,785 29,476 0 0 0 2,276 0 0 3,839 854 0 7,489
Total Flow lb/hr 1,032,610 150,410 941,823 0 0 0 90,790 0 0 121,246 26,977 0 242,765
Total Flow ACFH 21,589 49,849 19,614 0 0 0 346,987 0 0 1,212,280 269,725 0 3,780,830
Temperature °F 130.00 130.00 117.46 0.00 0.00 0.00 117.46 0.00 70.00 70.00 246.00
Pressure psia 717.00 717.00 40.00 0.00 0.00 0.00 40.00 0.00 18.00 18.00 15.00
Density lb/ft³ 47.83 3.02 48.02 0.00 0.00 0.00 0.26 0.00 0.10 0.10 0.06
Average MW lb/lbmol 32.52 26.00 31.95 0.00 0.00 0.00 39.89 0.00 31.58 31.58 32.42

43
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-23 Mass balance of methanol synthesis (continued)

Case 3
STREAM 701 702 703 704 705 706 707 708 709 710 711 712 713
HP Sweet Cold Mixed Warm Mixed Hot Mixed Stage 1 Stage 2 Hot Stage 2 Warm Stage 2 Cool Stage 2 LP Recycle HP Recycle
Description Flash Gas
Syngas Feed Feed Feed Product Cooled Feed Product Product Product Gas Gas
Mole Flow (Vapor/Liquid) lbmol/hr
AR 463 10,255 10,255 10,255 10,255 10,255 10,255 10,255 10,255 10,200 9,792 9,792
N2 845 19,330 19,330 19,330 19,330 19,330 19,330 19,330 19,330 19,255 18,485 18,485
CO 30,692 61,690 61,690 61,690 42,060 42,060 32,351 32,351 32,351 32,292 30,998 30,998
CO2 3,035 36,177 36,177 36,177 35,944 35,944 36,189 36,189 36,189 34,524 33,143 33,143
H2 60,227 97,485 97,485 97,485 57,525 57,525 38,839 38,839 38,839 38,810 37,258 37,258
H2O 301 313 313 313 555 555 319 319 319 12 12 12
CH4 1,298 27,368 27,368 27,368 27,368 27,368 27,368 27,368 27,368 27,156 26,070 26,070
CH3OH 0 3,295 3,295 3,295 23,142 23,142 32,590 32,590 32,590 3,432 3,295 3,295
C2H6O 0 40 40 40 46 46 52 52 52 41 40 40
C3H8O 0 0 0 0 2 2 3 3 3 0 0 0

Total Flow lbmol/hr 96,861 255,955 255,955 255,955 216,228 216,228 197,298 197,298 197,298 165,725 159,094 159,094
Total Flow lb/hr 1,183,090 5,019,980 5,019,980 5,019,980 5,019,980 5,019,980 5,019,980 5,019,980 5,019,980 3,996,850 3,836,890 3,836,890
Total Flow ACFH 966,372 2,283,970 3,207,910 3,203,200 2,953,770 2,720,560 2,563,470 1,864,960 1,864,960 1,418,000 1,361,250 1,319,340
Temperature °F 228.18 168.92 404.57 400.00 475.00 400.00 430.00 230.00 130.00 130.00 130.00 140.93
Pressure psia 755.00 755.00 750.00 747.00 737.00 732.00 727.00 722.00 720.00 717.00 717.00 755.00
Density lb/ft³ 1.22 2.20 1.56 1.57 1.70 1.85 1.96 2.69 2.69 2.82 2.82 2.91
Average MW lb/lbmol 12.21 19.61 19.61 19.61 23.22 23.22 25.44 25.44 25.44 24.12 24.12 24.12

STREAM 714 715 716 718 720 722 724 725 726 727 728 729 730
Refined Pure Methanol Methanol Gas to Coal Purge Gas to H2 to
Description Raw Methanol PSA Feed Raw Methanol Raw Methanol H2 Product Purge Gas Stack Gas
Methanol to Rectisol Flash Gas Drying Coal Drying Hydrogenate
Mole Flow (Vapor/Liquid) lbmol/hr
AR 55 408 1 0 0 0 54 0 0 665 148 0 704
N2 75 770 1 0 0 0 74 0 0 764 170 0 4,041
CO 60 1,292 0 0 0 0 59 0 0 709 158 0 0
CO2 1,664 1,381 312 0 0 0 1,352 0 0 1,120 249 0 1,930
H2 30 1,552 0 0 0 0 30 0 0 481 107 0 0
H2O 307 0 306 0 0 0 1 0 0 1 0 0 683
CH4 211 1,086 6 0 0 0 205 0 0 4 1 0 0
CH3OH 29,158 137 28,746 0 0 0 411 0 0 94 21 0 0
C2H6O 10 2 6 0 0 0 4 0 0 1 0 0 0
C3H8O 3 0 3 0 0 0 0 0 0 0 0 0 0

Total Flow lbmol/hr 31,573 6,629 29,382 0 0 0 2,191 0 0 3,839 854 0 7,489
Total Flow lb/hr 1,023,130 159,874 940,989 0 0 0 82,143 0 0 121,246 26,977 0 242,765
Total Flow ACFH 21,563 56,720 19,637 0 0 0 334,731 0 0 1,212,280 269,725 0 3,780,830
Temperature °F 130.00 130.00 118.53 0.00 0.00 0.00 118.53 0.00 70.00 70.00 246.00
Pressure psia 717.00 717.00 40.00 0.00 0.00 0.00 40.00 0.00 18.00 18.00 15.00
Density lb/ft³ 47.45 2.82 47.92 0.00 0.00 0.00 0.25 0.00 0.10 0.10 0.06
Average MW lb/lbmol 32.41 24.12 32.03 0.00 0.00 0.00 37.49 0.00 31.58 31.58 32.42

44
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-24 Power cycle heat and material balances

Case 1

45
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-24 Power cycle heat and material balances (continued)

Case 2

46
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-24 Power cycle heat and material balances (continued)

Case 3

47
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-25 Water balances

Case 1 and 2

48
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 3-25 Water balances (continued)

Case 3

49
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

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50
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

4 Economic Analysis
4.1 Cost Estimating Methodology
Capital and operating cost estimates developed for these cases were based on adjusted vendor-
furnished quotes, previous studies, actual cost data, or the best available information. All
estimates are expressed in June 2011 dollars consistent with NETL methodology documented in
Quality Guidelines and baseline reports. [17,18,19]

4.1.1 Capital Costs

The total overnight cost (TOC) for each plant was calculated by adding owner’s costs to the total
plant cost (TPC). TPC includes all equipment (complete with initial chemical and catalyst
loadings), materials, labor (direct and indirect), engineering and construction management, and
contingencies (process and project).
The capital costs have an estimated accuracy of +30/-15 percent, consistent with the screening
study level of design engineering applied to the various cases in the study. The value of the
study lies not in the absolute accuracy of the individual cases, but in the fact that all cases were
evaluated under the same set of technical and economic assumptions. The consistency of the
approach allows meaningful comparisons among the cases evaluated.
Process contingency was added to cost accounts to compensate for uncertainty in cost estimates
caused by performance uncertainties associated with the development status of a technology.
Project contingency was added to the engineering/procurement/construction management
(EPCM) capital accounts to cover project uncertainty and the cost of any additional equipment
that would result from a detailed design. The contingencies represent costs that are expected to
occur. Each bare erected cost (BEC) account was evaluated against the level of estimate detail
and field experience to determine project contingency.
TOC values are expressed in June 2011 dollars. The estimate represents current commercial
offerings for the gasification and methanol synthesis and conversion processes. The estimates
represent a complete fuels plant facility. The boundary limit is defined as the total plant facility
within the fence line, including the coal receiving facilities and water supply system. Costs were
grouped according to a process/system-oriented code of accounts; all reasonably allocable
components of a system or process are included in the specific system account in contrast to a
facility, area, or commodity account structure.

4.1.2 Feedstock prices

[Link] Coal Price
The coal type assumed for this study is a Powder River Basin (PRB) subbituminous coal
supplied from the Montana Rosebud mine. The coal price was assumed to be $36.57 per short
ton (year 2011 dollars) based on Montana Rosebud PRB Coal delivered to the Midwest as
specified in the QGESS: Fuel Prices for Selected Feedstocks in NETL Studies. [1]

51
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

[Link] Natural Gas Price

The natural gas price was assumed to be $6.13/MMBtu (2011 dollars) based on natural gas
prices delivered to Midwest power plants as specified in the QGESS: Fuel Prices for Selected
Feedstocks in NETL Studies. [1]

4.1.3 Production Costs and Expenses

The production, or operations and maintenance (O&M), costs described in this section pertain to
charges associated with operating and maintaining the methanol plant over its expected life.
O&M costs are determined an annual basis for the first year of operation. Quantities for major
consumables, such as feedstock and fuel, were taken from the heat and mass balance developed
for this application. Using reference data, other consumables were evaluated on the basis of the
quantity required. Operating labor costs were determined on the basis of the number of
operators. Maintenance costs were evaluated on the basis of requirements for each major plant
section.
The O&M costs and expenses associated with the plant include the following:
 Operating labor
 Maintenance – material and labor
 Administrative and support labor
 Consumables
 Fuel/Feedstock cost
 Taxes and insurance
These costs and expenses are estimated on a reference basis and escalated to June 2011 dollars.
The costs assume normal operation and do not include the initial startup costs. The operating
labor, maintenance material and labor, and other labor-related costs were combined and then
divided into two components: fixed O&M costs, which are independent of liquids production,
and variable O&M costs, which are proportional to liquids production. The variable O&M cost
estimate allocation is based on the plant capacity factor.
The other operating costs, consumables, and feedstock, are determined on a daily, 100-percent
operating-capacity basis and are adjusted to an annual plant operation basis. The inputs for each
category of operating costs and expenses are identified in the succeeding subsections, along with
more specific discussion of the evaluation processes.

4.1.4 Required Selling Price

The figure-of-merit in this report is the required selling price (RSP) expressed in $/gal of crude
methanol. The RSP values were calculated using the Power Systems Financial Model (PSFM)
[20] and estimated to be the value calculated when the required return on equity (ROE) equals
the internal rate of return (IRR) for 30 years of operation based on the assumed financial
structure and escalations. RSP was assumed to escalate at three percent per year for the thirty-
year economic life of the plant. All costs are expressed in June 2011 dollars.
For the natural gas case which generates excess electricity, the price of electricity was assumed
to be $59.59/MWh expressed in June 2011 dollar. This is based on the lowest cost option from

52
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

the Bituminous Baseline study results [19], which was considered to be typical of baseline 2011
plant designs. A sensitivity analysis of the RSP to this assumed value is included in the results
discussion. While the excess power can be sold to the grid; the sale may be at a steep discount as
entities that are negotiating a power purchase agreement will know the power production is an
inherent by-product of core methanol production operations. Consequently, the actual achieved
transfer price for excess power will be a significant risk in natural gas feedstock projects and
would be highly project dependent. The impact of the price on the methanol RSP is reflected in
the sensitivity analysis results.
The capital and operating costs for CO2 T&S were independently estimated by NETL at
$11/metric ton of CO2 in 2011 dollars. [9]
The RSP was calculated for each case assuming (i) a financial structure representative of a
commercial fuels project, and (ii) a financial structure with loan guarantees or other government
subsidies. The financial assumptions and structures used to estimate the RSPs are shown in
Exhibit 4-1, Exhibit 4-2, and Exhibit 4-3. [21] A sensitivity of the RSP to this assumed structure
was included in the results discussion.

Exhibit 4-1 Financial assumptions for PSFM [17]

Parameter Value
TAXES
Income Tax Rate 38% (Effective, 34% Federal, 6% State)
Capital Depreciation 20 years, 150% declining balance
Investment Tax Credit None
Tax Holiday None
FINANCING TERMS
Repayment Term of Debt 30 years
Grace Period on Debt Repayment None
Debt Reserve Fund None
TREATMENT OF CAPITAL COSTS
Capital Cost Escalation During Construction a
3.6%
(nominal annual rate)
Distribution of Total Overnight Capital over the
5-Year Period: 10%, 30%, 25%, 20%, 15%
Capital Expenditure Period (before escalation)
Working Capital zero for all parameters
100% (this assumption introduces a very
% of Total Overnight Capital that is Depreciated small error even if a substantial amount of
TOC is actually non-depreciable)
INFLATION
b
RSP, O&M, Fuel Escalation (nominal annual rate) 3.0% RSP, O&M, COE, Fuel
a
A nominal average annual rate of 3.6 percent is assumed for escalation of capital costs during construction. This rate is
equivalent to the nominal average annual escalation rate for process plant construction costs between 1947 and 2008,
according to the Chemical Engineering Plant Cost Index.
b
An average annual inflation rate of 3.0 percent is assumed. This rate is equivalent to the average annual escalation rate
between 1947 and 2008 for the U.S. Department of Labor's Producer Price Index for Finished Goods, the so-called "headline"
index of the various Producer Price Indices. (The Producer Price Index for the Electric Power Generation Industry may be more
applicable, but that data does not provide a long-term historical perspective since it only dates back to December 2003.)

53
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-2 Financial structure for commercial fuels projects [22]

Type of Security Percent of Total Current (Nominal) Dollar Cost

Debt 50 8% (LIBOR=3.5% + 4.5%)
Equity 50 20%

Exhibit 4-3 Financial structure for loan guarantee projects [23]

Type of Security Percent of Total Current (Nominal) Dollar Cost

Debt 60 4.56% (CMT=4.34% + 0.22%)
Equity 40 20%

4.2 Cost Estimation results

The capital and O&M costs for each of the cases are shown in Exhibit 4-4 through Exhibit 4-9.

54
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-4 Capital cost summary for Case 1

Client: USDOE/NETL Report Date: 2013-Sep-12
Project: Baseline Study of Crude Methanol Plants
TOTAL PLANT COST SUMMARY
Case: Case 1 - Shell Coal to Methanol w/o CO₂ capture
Plant Size: Estimate Type: Conceptual Cost Base (Jun) 2011 ($x1000)
941,823 Methanol (lb/hr):
Acct Equipment Material Labor Sales Bare Erected Eng'g CM Contingencies TOTAL PLANT COST
No. Item/Description Cost Cost Direct Indirect Tax Cost $ H.O.& Fee Process Project $
1 COAL & SORBENT HANDLING $36,523 $6,549 $28,312 $0 $0 $71,384 $6,479 $0 $15,573 $93,436
2 COAL & SORBENT PREP & FEED $440,636 $31,753 $70,335 $0 $0 $542,724 $47,045 $0 $117,954 $707,724
3 FEEDWATER & MISC. BOP SYSTEMS $29,200 $9,205 $20,034 $0 $0 $58,439 $5,478 $0 $14,635 $78,552
4 GASIFIER & ACCESSORIES
4.1 Gasifier, Syngas Cooler & Auxiliaries (Shell) $429,138 $0 $194,177 $0 $0 $623,315 $55,887 $89,766 $118,739 $887,708
4.2 Syngas Cooling w/4.1 $0 w/4.1 $0 $0 $0 $0 $0 $0 $0
4.3 Air Separation Unit $608,392 $0 w/equip. $0 $0 $608,392 $58,971 $0 $66,736 $734,099
4.4-4.9 Other Gasification Equipment $107,905 $32,835 $60,116 $0 $0 $200,855 $19,296 $0 $46,764 $266,915
SUBTOTAL 4 $1,145,435 $32,835 $254,293 $0 $0 $1,432,563 $134,154 $89,766 $232,239 $1,888,722
5A GAS CLEANUP & PIPING
5A.1 Rectisol System $350,917 $0 w/equip $0 $0 $350,917 $33,153 $70,183 $90,851 $545,104
5A.2-5A.9 Other Gas cleanup & Piping Equipment $72,962 $8,963 $69,557 $0 $0 $151,482 $14,617 $667 $33,312 $200,079
SUBTOTAL 5A $423,879 $8,963 $69,557 $0 $0 $502,399 $47,769 $70,851 $124,163 $745,182
5B CO₂ Removal and COMPRESSION $12,189 $0 $4,595 $0 $0 $16,784 $1,608 $0 $3,678 $22,070
5C METHANOL PRODUCTION $133,185 $56,033 $112,067 $0 $0 $301,285 $30,129 $0 $66,283 $397,696
6 COMBUSTION TURBINE/ACCESSORIES
6.1 Combustion Turbine Generator $20,055 $0 $1,310 $0 $0 $21,365 $1,797 $0 $2,356 $25,518
6.2-6.9 Combustion Turbine Other $0 $181 $196 $0 $0 $377 $32 $0 $82 $491
SUBTOTAL 6 $20,055 $181 $1,506 $0 $0 $21,743 $1,829 $0 $2,437 $26,009
7 HRSG, DUCTING & STACK
7.1 Heat Recovery Steam Generator $44,163 $0 $8,308 $0 $0 $52,471 $4,357 $0 $5,683 $62,511
7.2-7.9 HRSG Accessories, Ductwork, & Stack $2,477 $1,226 $1,658 $0 $0 $5,361 $449 $0 $883 $6,694
SUBTOTAL 7 $46,640 $1,226 $9,966 $0 $0 $57,833 $4,806 $0 $6,566 $69,205
8 STEAM TURBINE GENERATOR
8.1 Steam TG & Accessories $35,686 $0 $4,793 $0 $0 $40,479 $3,881 $0 $4,436 $48,797
8.2-8.9 Turbine Plant Auxiliaries and Steam Piping $20,278 $1,114 $9,648 $0 $0 $31,040 $2,790 $0 $6,975 $40,805
SUBTOTAL 8 $55,964 $1,114 $14,441 $0 $0 $71,519 $6,671 $0 $11,411 $89,601
9 COOLING WATER SYSTEM $17,962 $19,584 $14,636 $0 $0 $52,182 $4,828 $0 $11,587 $68,597
10 ASH/SPENT SORBENT HANDLING SYS $80,651 $3,590 $75,947 $0 $0 $160,188 $15,498 $0 $18,339 $194,026
11 ACCESSORY ELECTRIC PLANT $34,017 $19,371 $34,182 $0 $0 $87,571 $7,605 $0 $18,897 $114,073
12 INSTRUMENTATION & CONTROL $11,382 $3,440 $9,546 $0 $0 $24,369 $2,187 $1,218 $4,978 $32,753
13 IMPROVEMENTS TO SITE $5,818 $2,834 $15,212 $0 $0 $23,865 $2,356 $0 $7,866 $34,088
14 BUILDINGS & STRUCTURES $0 $7,832 $10,959 $0 $0 $18,791 $1,703 $0 $3,333 $23,827
TOTAL COST $2,493,538 $204,510 $745,590 $0 $0 $3,443,638 $320,147 $161,835 $659,940 $4,585,560

Total Overnight Costs (TOC) $5,614,724

Total As-Spent Cost (TASC) $6,630,989

55
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-5 Capital cost summary for Case 2

Client: USDOE/NETL Report Date: 2014-Sep-22
Project: Baseline Study of Crude Methanol Plants
TOTAL PLANT COST SUMMARY
Case: Case 2 - Shell Coal to Methanol w/ CO₂ capture
Plant Size: Estimate Type: Conceptual Cost Base (Jun) 2007 ($x1000)
941,823 Methanol (lb/hr):
Acct Equipment Material Labor Sales Bare Erected Eng'g CM Contingencies TOTAL PLANT COST
No. Item/Description Cost Cost Direct Indirect Tax Cost $ H.O.& Fee Process Project $
1 COAL & SORBENT HANDLING $36,523 $6,549 $28,312 $0 $0 $71,384 $6,479 $0 $15,573 $93,436
2 COAL & SORBENT PREP & FEED $440,636 $31,753 $70,335 $0 $0 $542,724 $47,045 $0 $117,954 $707,724
3 FEEDWATER & MISC. BOP SYSTEMS $31,578 $9,286 $20,105 $0 $0 $60,970 $5,722 $0 $15,190 $81,882
4 GASIFIER & ACCESSORIES
4.1 Gasifier, Syngas Cooler & Auxiliaries (Shell) $429,138 $0 $194,177 $0 $0 $623,315 $55,887 $89,766 $118,739 $887,708
4.2 Syngas Cooling w/4.1 $0 w/4.1 $0 $0 $0 $0 $0 $0 $0
4.3 Air Separation Unit $608,392 $0 w/equip. $0 $0 $608,392 $58,971 $0 $66,736 $734,099
4.4-4.9 Other Gasification Equipment $107,905 $32,835 $60,116 $0 $0 $200,855 $19,296 $0 $46,764 $266,915
SUBTOTAL 4 $1,145,435 $32,835 $254,293 $0 $0 $1,432,563 $134,154 $89,766 $232,239 $1,888,722
5A GAS CLEANUP & PIPING
5A.1 Rectisol System $350,917 $0 w/equip $0 $0 $350,917 $33,153 $70,183 $90,851 $545,104
5A.2-5A.9 Other Gas cleanup & Piping Equipment $72,962 $8,963 $69,557 $0 $0 $151,482 $14,617 $667 $33,312 $200,079
SUBTOTAL 5A $423,879 $8,963 $69,557 $0 $0 $502,399 $47,769 $70,851 $124,163 $745,182
5B CO₂ Removal and COMPRESSION $144,222 $0 $50,113 $0 $0 $194,335 $17,686 $15,082 $45,420 $272,523
5C METHANOL PRODUCTION $133,185 $56,033 $112,067 $0 $0 $301,285 $30,129 $0 $66,283 $397,696

6 COMBUSTION TURBINE/ACCESSORIES
6.1 Combustion Turbine Generator $29,881 $0 $1,952 $0 $0 $31,832 $2,678 $0 $3,510 $38,019
6.2-6.9 Combustion Turbine Other $0 $270 $292 $0 $0 $562 $47 $0 $122 $731
SUBTOTAL 6 $29,881 $270 $2,244 $0 $0 $32,394 $2,725 $0 $3,631 $38,750
7 HRSG, DUCTING & STACK
7.1 Heat Recovery Steam Generator $44,914 $0 $8,449 $0 $0 $53,363 $4,431 $0 $5,779 $63,573
7.2-7.9 HRSG Accessories, Ductwork, & Stack $2,519 $1,301 $1,737 $0 $0 $5,557 $465 $0 $921 $6,943
SUBTOTAL 7 $47,433 $1,301 $10,186 $0 $0 $58,920 $4,896 $0 $6,700 $70,516
8 STEAM TURBINE GENERATOR
8.1 Steam TG & Accessories $36,292 $0 $4,875 $0 $0 $41,167 $3,947 $0 $4,511 $49,626
8.2-8.9 Turbine Plant Auxiliaries and Steam Piping $20,623 $1,133 $9,812 $0 $0 $31,567 $2,838 $0 $7,094 $41,498
SUBTOTAL 8 $56,915 $1,133 $14,686 $0 $0 $72,734 $6,785 $0 $11,605 $91,124
9 COOLING WATER SYSTEM $18,267 $19,916 $14,885 $0 $0 $53,068 $4,910 $0 $11,784 $69,762
10 ASH/SPENT SORBENT HANDLING SYS $80,651 $3,590 $75,947 $0 $0 $160,188 $15,498 $0 $18,339 $194,026
11 ACCESSORY ELECTRIC PLANT $39,363 $23,108 $40,531 $0 $0 $103,002 $8,955 $0 $22,315 $134,271
12 INSTRUMENTATION & CONTROL $12,555 $3,795 $10,530 $0 $0 $26,880 $2,413 $1,344 $5,491 $36,128
13 IMPROVEMENTS TO SITE $6,009 $2,891 $15,764 $0 $0 $24,665 $2,435 $0 $8,130 $35,231
14 BUILDINGS & STRUCTURES $0 $8,022 $11,375 $0 $0 $19,396 $1,754 $0 $3,431 $24,581
TOTAL COST $2,646,532 $209,446 $800,930 $0 $0 $3,656,908 $339,355 $177,042 $708,249 $4,881,555
Total Overnight Costs (TOC) $5,973,133
Total As-Spent Cost (TASC) $7,054,270

56
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-6 Capital cost summary for Case 3

Client: USDOE/NETL Report Date: 2014-Sep-22
Project: Baseline Study of Crude Methanol Plants
TOTAL PLANT COST SUMMARY
Case: Case 3 - NG to Methanol w/ CO₂ capture
Plant Size: Estimate Type: Conceptual Cost Base (Jun) 2007 ($x1000)
940,989 Methanol (lb/hr):
Acct Equipment Material Labor Sales Bare Erected Eng'g CM Contingencies TOTAL PLANT COST
No. Item/Description Cost Cost Direct Indirect Tax Cost $ H.O.& Fee Process Project $
1 COAL & SORBENT HANDLING $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
2 COAL & SORBENT PREP & FEED $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
3 Feedwater, Natural Gas & MISC. BOP SYSTEMS $51,389 $5,804 $10,963 $0 $0 $68,156 $6,490 $0 $15,841 $90,487
4 GASIFIER & ACCESSORIES
4.1 Gasifier, Syngas Cooler & Auxiliaries (Shell) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
4.2 Syngas Cooling w/4.7 $0 w/4.7 $0 $0 $0 $0 $0 $0 $0
4.3 Air Separation Unit $482,112 $0 w/equip. $0 $0 $482,112 $46,731 $0 $52,884 $581,728
4.4-4.9 Reformer and Other Gas processing Equipment $329,244 $0 w/equip. $0 $0 $329,244 $31,913 $0 $36,116 $397,273
SUBTOTAL 4 $811,357 $0 $0 $0 $0 $811,357 $78,644 $0 $89,000 $979,001
5A GAS CLEANUP & PIPING $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
5B CO₂ Removal and COMPRESSION $107,192 $0 $92,382 $0 $0 $199,574 $17,057 $33,368 $50,000 $299,998
5C METHANOL PRODUCTION $133,067 $55,984 $111,967 $0 $0 $301,018 $30,102 $0 $66,224 $397,344
6 COMBUSTION TURBINE/ACCESSORIES
6.1 Combustion Turbine Generator $31,501 $0 $2,057 $0 $0 $33,559 $2,823 $0 $3,700 $40,081
6.2-6.9 Combustion Turbine Other $0 $285 $308 $0 $0 $593 $50 $0 $128 $771
SUBTOTAL 6 $31,501 $285 $2,365 $0 $0 $34,151 $2,872 $0 $3,828 $40,852
7 HRSG, DUCTING & STACK
7.1 Heat Recovery Steam Generator $39,776 $0 $7,482 $0 $0 $47,258 $3,924 $0 $5,118 $56,301
7.2-7.9 HRSG Accessories, Ductwork, & Stack $2,231 $1,181 $1,565 $0 $0 $4,976 $417 $0 $828 $6,221
SUBTOTAL 7 $42,006 $1,181 $9,048 $0 $0 $52,235 $4,341 $0 $5,946 $62,521
8 STEAM TURBINE GENERATOR
8.1 Steam TG & Accessories $32,141 $0 $4,317 $0 $0 $36,458 $3,496 $0 $3,995 $43,948
8.2-8.9 Turbine Plant Auxiliaries and Steam Piping $18,263 $1,003 $8,689 $0 $0 $27,956 $2,513 $0 $6,282 $36,751
SUBTOTAL 8 $50,404 $1,003 $13,006 $0 $0 $64,413 $6,009 $0 $10,277 $80,699
9 COOLING WATER SYSTEM $16,177 $17,638 $13,182 $0 $0 $46,997 $4,348 $0 $10,436 $61,781
10 ASH/SPENT SORBENT HANDLING SYS $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
11 ACCESSORY ELECTRIC PLANT $29,449 $15,268 $27,013 $0 $0 $71,730 $6,201 $0 $15,362 $93,293
12 INSTRUMENTATION & CONTROL $8,260 $2,497 $6,928 $0 $0 $17,684 $1,587 $884 $3,613 $23,768
13 IMPROVEMENTS TO SITE $8,744 $2,241 $6,842 $0 $0 $17,828 $1,760 $0 $5,876 $25,464
14 BUILDINGS & STRUCTURES $0 $5,272 $7,758 $0 $0 $13,030 $1,175 $0 $2,325 $16,529
TOTAL COST $1,289,547 $107,172 $301,454 $0 $0 $1,698,173 $160,586 $34,253 $278,728 $2,171,740
Total Overnight Costs (TOC) $2,644,295
Total As-Spent Cost (TASC) $3,122,912

57
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-7 O&M cost summary for Case 1

INITIAL & ANNUAL O&M EXPENSES Cost Base (Jun): 2011
Case 1 - Shell Coal to Methanol w/o CO₂ capture
MWe-net: 0
Methanol (lb/hr): 941,823 Capacity Factor (%): 90
OPERATING & MAINTENANCE LABOR
Operating Labor
Operating Labor Rate(base): 39.70 $/hour
Operating Labor Burden: 30.00 % of base
Labor O-H Charge Rate: 25.00 % of labor
Total
Skilled Operator 2.0 2.0
Operator 10.0 10.0
Foreman 1.0 1.0
Lab Tech's, etc. 3.0 3.0
TOTAL-O.J.'s 16.0 16.0
Annual Cost Annual Unit Cost
$ $/lb
Annual Operating Labor Cost $7,233,658 $0.001
Maintenance Labor Cost $44,717,809 $0.006
Administrative & Support Labor $12,987,867 $0.002
Property Taxes and Insurance $91,711,204 $0.012
TOTAL FIXED OPERATING COSTS $156,650,538 $0.021
VARIABLE OPERATING COSTS
$/lb
Maintenance Material Cost $67,076,714 $0.00903
Consumables Consumption Unit Initial Fill
Initial Fill /Day Cost Cost
Water(/1000 gallons) 0 7,998 1.67 $0 $4,398,421 $0.00059
Chemicals
MU & WT Chem. (lb) 0 47,653 0.27 $0 $4,192,723 $0.00056
Carbon (Mercury Removal) (lb) 263,903 402 1.63 $428,905 $214,452 $0.00003
MEA Solvent (ton) 0 0.0 3,751.70 $0 $0 $0.00000
Water Gas Shift Catalyst (ft 3) 10,552 7.23 771.99 $8,146,310 $1,832,920 $0.00025
Claus Catalyst (ft 3) w/equip 2.06 203.15 $0 $137,210 $0.00002
NG ATR Reformer Catalyst (ft 3) 0 0.00 650.00 $0 $0 $0.00000
Methanol Synthesis Catalyst (ft 3) 4,056 3.70 534.68 $2,168,500 $650,550 $0.00009
Aromatics Hydrotreater Catalyst (ft 3) 0 0.00 507.94 $0 $0 $0.00000
Subtotal Chemicals $10,743,716 $7,027,856 $0.00095
Other
Supplemental Electricity (for consumption) (MWh) 0 0 62.33 $0 $0 $0.00000
Gases, N2 etc. (/100scf) 0 0 0.00 $0 $0 $0.00000
L.P. Steam (/1000 pounds) 0 0 0.00 $0 $0 $0.00000
Subtotal Other $0 $0 $0.00000
Waste Disposal
Spent Mercury Catalyst (lb.) 0 402 0.65 $0 $85,781 $0.00001
Flyash (ton) 0 0 0.00 $0 $0 $0.00000
Slag (ton) 0 2,081 25.11 $0 $17,167,503 $0.00231
Subtotal-Waste Disposal $0 $17,253,285 $0.00232
By-products & Emissions
Sulfur (tons) 0 140 0.00 $0 $0 $0.00000
Supplemental Electricity (for sale) (MWh) 0 0 -59.59 $0 $0 $0.00000
Subtotal By-Products $0 $0 $0.00000
TOTAL VARIABLE OPERATING COSTS $10,743,716 $95,756,275 $0.01290
Fuel/Feedstock
Coal (ton) 0 19,418 36.57 $0 $233,276,555 $0.03142
Natural Gas (MMBtu) 0 16,210 6.13 $0 $32,641,812 $0.00440

58
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-8 O&M cost summary for Case 2

INITIAL & ANNUAL O&M EXPENSES Cost Base (Jun): 2011
Case 2 - Shell Coal to Methanol w/ CO₂ capture
MWe-net: 0
Methanol (lb/hr): 941,823 Capacity Factor (%): 90
OPERATING & MAINTENANCE LABOR
Operating Labor
Operating Labor Rate(base): 39.70 $/hour
Operating Labor Burden: 30.00 % of base
Labor O-H Charge Rate: 25.00 % of labor
Total
Skilled Operator 2.0 2.0
Operator 10.0 10.0
Foreman 1.0 1.0
Lab Tech's, etc. 3.0 3.0
TOTAL-O.J.'s 16.0 16.0
Annual Cost Annual Unit Cost
$ $/lb
Annual Operating Labor Cost $7,233,658 $0.001
Maintenance Labor Cost $47,038,006 $0.006
Administrative & Support Labor $13,567,916 $0.002
Property Taxes and Insurance $97,631,091 $0.013
TOTAL FIXED OPERATING COSTS $165,470,670 $0.022
VARIABLE OPERATING COSTS
$/lb
Maintenance Material Cost $70,557,009 $0.00950
Consumables Consumption Unit Initial Fill
Initial Fill /Day Cost Cost
Water(/1000 gallons) 0 7,998 1.67 $0 $4,398,421 $0.00059
Chemicals
MU & WT Chem. (lb) 0 47,653 0.27 $0 $4,192,723 $0.00056
Carbon (Mercury Removal) (lb) 263,903 402 1.63 $428,905 $214,452 $0.00003
MEA Solvent (ton) 117 0.16 3,751.70 $439,595 $202,615 $0.00003
Water Gas Shift Catalyst (ft 3) 10,552 7.23 771.99 $8,146,310 $1,832,920 $0.00025
Claus Catalyst (ft 3) w/equip 2.06 203.15 $0 $137,210 $0.00002
Triethylene Glycol (gal) 0 592.60 6.57 $0 $1,279,570 $0.00017
NG ATR Reformer Catalyst (ft 3) 0 0.00 650.00 $0 $0 $0.00000
Methanol Synthesis Catalyst (ft 3) 4,056 3.70 534.68 $2,168,500 $650,550 $0.00009
Aromatics Hydrotreater Catalyst (ft 3) 0 0.00 507.94 $0 $0 $0.00000
Subtotal Chemicals $11,183,311 $8,510,041 $0.00115
Other
Supplemental Electricity (for consumption) (MWh) 0 0 62.33 $0 $0 $0.00000
Gases, N2 etc. (/100scf) 0 0 0.00 $0 $0 $0.00000
L.P. Steam (/1000 pounds) 0 0 0.00 $0 $0 $0.00000
Subtotal Other $0 $0 $0.00000
Waste Disposal
Spent Mercury Catalyst (lb.) 0 402 0.65 $0 $85,781 $0.00001
Flyash (ton) 0 0 0.00 $0 $0 $0.00000
Slag (ton) 0 2,081 25.11 $0 $17,167,503 $0.00231
Subtotal-Waste Disposal $0 $17,253,285 $0.00232
By-products & Emissions
Sulfur (tons) 0 140 0.00 $0 $0 $0.00000
Supplemental Electricity (for sale) (MWh) 0 0 -59.59 $0 $0 $0.00000
Subtotal By-Products $0 $0 $0.00000
TOTAL VARIABLE OPERATING COSTS $11,183,311 $100,718,756 $0.01356
Fuel/Feedstock
Coal (ton) 0 19,418 36.57 $0 $233,276,555 $0.03142
Natural Gas (MMBtu) 0 28,435 6.13 $0 $57,259,665 $0.00771

59
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-9 O&M cost summary for Case 3

INITIAL & ANNUAL O&M EXPENSES Cost Base (Jun): 2011
Case 3 - NG to Methanol w/ CO₂ capture
MWe-net: 0
Methanol (lb/hr): 940,989 Capacity Factor (%): 90
OPERATING & MAINTENANCE LABOR
Operating Labor
Operating Labor Rate(base): 39.70 $/hour
Operating Labor Burden: 30.00 % of base
Labor O-H Charge Rate: 25.00 % of labor
Total
Skilled Operator 2.0 2.0
Operator 4.0 4.0
Foreman 1.0 1.0
Lab Tech's, etc. 3.0 3.0
TOTAL-O.J.'s 10.0 10.0
Annual Cost Annual Unit Cost
$ $/lb
Annual Operating Labor Cost $4,521,036 $0.001
Maintenance Labor Cost $20,926,592 $0.003
Administrative & Support Labor $6,361,907 $0.001
Property Taxes and Insurance $43,434,792 $0.006
TOTAL FIXED OPERATING COSTS $75,244,327 $0.010
VARIABLE OPERATING COSTS
$/lb
Maintenance Material Cost $31,389,888 $0.00423
Consumables Consumption Unit Initial Fill
Initial Fill /Day Cost Cost
Water(/1000 gallons) 0 2,454 1.67 $0 $1,349,340 $0.00018
Chemicals
MU & WT Chem. (lb) 0 14,619 0.27 $0 $1,286,236 $0.00017
Carbon (Mercury Removal) (lb) 0 0 1.63 $0 $0 $0.00000
MEA Solvent (ton) 219 0.31 3,751.70 $821,845 $378,799 $0.00005
Water Gas Shift Catalyst (ft 3) 0 0.00 771.99 $0 $0 $0.00000
Claus Catalyst (ft 3) w/equip 0.00 203.15 $0 $0 $0.00000
Triethylene Glycol (gal) 0 88.93 6.57 $0 $192,014 $0.00003
NG ATR Reformer Catalyst (ft 3) 14,670 13.40 650.00 $9,535,505 $2,860,651 $0.00039
Methanol Synthesis Catalyst (ft 3) 4,074 3.72 534.68 $2,178,434 $653,530 $0.00009
Aromatics Hydrotreater Catalyst (ft 3) 0 0.00 507.94 $0 $0 $0.00000
Subtotal Chemicals $12,535,784 $5,371,231 $0.00072
Other
Supplemental Electricity (for consumption) (MWh) 0 0 62.33 $0 $0 $0.00000
Gases, N2 etc. (/100scf) 0 0 0.00 $0 $0 $0.00000
L.P. Steam (/1000 pounds) 0 0 0.00 $0 $0 $0.00000
Subtotal Other $0 $0 $0.00000
Waste Disposal
Spent Mercury Catalyst (lb.) 0 0 0.65 $0 $0 $0.00000
Flyash (ton) 0 0 0.00 $0 $0 $0.00000
Slag (ton) 0 0 25.11 $0 $0 $0.00000
Subtotal-Waste Disposal $0 $0 $0.00000
By-products & Emissions
Sulfur (tons) 0 0 0.00 $0 $0 $0.00000
Supplemental Electricity (for sale) (MWh) 0 2,758 -59.59 $0 -$53,994,889 -$0.00728
Subtotal By-Products $0 -$53,994,889 -$0.00728
TOTAL VARIABLE OPERATING COSTS $12,535,784 -$15,884,429 -$0.00214
Fuel/Feedstock
Coal (ton) 0 0 36.57 $0 $0 $0.00000
Natural Gas (MMBtu) 0 315,872 6.13 $0 $636,072,345 $0.08574

60
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

4.3 Summary Comparisons

The cost of product (crude methanol) was estimated for each case and the results are listed in
Exhibit 4-10 and illustrated in Exhibit 4-11. The RSP for the natural gas case is significantly
lower than the coal cases. While the coal case values are dominated by the capital costs, the
natural gas case is dominated by the feedstock costs.

Exhibit 4-10 Cost estimation results

Case 1 2 3
Total Plant Cost (2011 million$) 4,586 4,882 2,172
Total Overnight Cost (2011 million$) 5,615 5,973 2,644
B
Total As Spent Capital (2011 million$) 6,440 6,631 6,851 7,054 3,033 3,123
A
RSP Component Details ($/gal)
B
Capital 0.85 1.09 0.91 1.16 0.40 0.52
Fixed O&M 0.14 0.15 0.07
Variable O&M 0.09 0.09 0.03
Coal 0.21 0.21 0
Natural gas 0.03 0.05 0.57
Power 0 0 -0.05
CO2 T&S 0 0.06 0.01
B
RSP Total ($/gal) 1.31 1.56 1.46 1.72 1.03 1.14
E
RSP Total ($/ton) 396.70 469.29 441.44 518.67 311.17 345.39
BC
Costs of CO2 captured ($/tonne) N/A 16.36 19.20 N/A
BD
Cost of CO2 avoided ($/tonne) N/A 29.67 32.75 N/A
A
Capacity factor assumed to be 90 percent.
B
Values are shown for two financial structures.
The first (lower) value is based on the loan guarantee finance structure.
The second (higher) value is based on the commercial fuels finance structure.
C
Excluded CO2 T&S.
D
Includes CO2 T&S.
E
Based on 332.6 gal/tonne or 301.73 gal/ton.
All costs are in June 2011 dollars.

The RSP for the natural gas case is consistent with the information provided in Methanex’s 2011
annual report. [24] Specifically, the margin inferred from their financial statements is on par
with the weighted average cost of capital used in the PSFM for this study. The average sales
prices of methanol reported by Methanex and other vendors (~ 1.28 dollars per gallon or
$426 dollars per metric ton in Methanex historical data reference [25]) are higher than the RSP
of the natural gas cases in this study because their prices also cover other significant costs of
methanol sales and distribution associated with transporting the methanol from production

61
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

locations to markets and distribution within markets5. The Methanex price may also include the
costs of purification into refined methanol.

Exhibit 4-11 Components of required selling price

Loan Guarantee Finance Structure Commercial Fuel Finance Structure

2.50
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.00
1.72
0.06 Methanex
1.56 0.05
1.46 0.03 2011 Price
1.50 0.21
1.31 0.06 0.21
0.05 0.09 $1.28/gal
0.03 0.09 1.14
0.21 0.15
0.21 1.03 0.14 0.01
0.09 0.01 RSP ($/gal)
1.00 0.09
0.15 CO₂ T&S $/gal
0.14 0.57
0.57 Elec $/gal
1.16 0.03 NG $/gal
1.09 0.07
0.50 0.91 0.03 Coal $/gal
0.85 0.07
Variable $/gal
0.52
0.40 Fixed $/gal
0.00 Capital $/gal

-0.50
Case 1 - Shell Case 2 - Shell Case 3 - NG to Case 1 - Shell Case 2 - Shell Case 3 - NG to
Coal to Coal to Methanol w/ Coal to Coal to Methanol w/
Methanol w/o Methanol w/ CO₂ capture Methanol w/o Methanol w/ CO₂ capture
CO₂ capture CO₂ capture CO₂ capture CO₂ capture

Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

The sensitivity of the RSP to the coal and natural gas feedstock prices is illustrated in
Exhibit 4-12 and Exhibit 4-13, respectively. The prices used in this study are based on the
NETL QGESS Recommended Fuel Prices. [1] Cases 1 and 2 use coal from the Powder River
Basin (PRB) region in Montana, priced at $36.57/ton ($2.1351/MMBtu) including delivery to the
Midwestern site, as the feedstock. Case 3 uses natural gas, priced at $6.13/MMBtu. Cases 1
and 2 also burn some natural gas to provide additional power required by the process.6 The cost
of the natural gas used for the NGCCs in the coal cases is less than four percent of the RSP
values, so it was assumed constant at $6.13/MMBtu for the coal cases in this chart. The
expected RSPs for the case using natural gas as feedstock are below those for the coal-based
cases because of the lower capital and fixed operating costs. On an energy content basis, the
5
These costs are a key reason why chemicals and fuels projects derivative of potential mega-methanol projects are generally co-located with
methanol production.
6
A natural gas combined cycle plant was used to generate additional power in the coal gasification cases to make the plant approximately power
neutral while maximizing the production of crude methanol (i.e., no syngas is diverted for power production).

62
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

RSPs for all cases increase at approximately the same rate with increases in the feedstock prices
due to the similarity between the feedstock requirements per unit of product. Cases 1 and 2
require 9.75 MMBtu of PRB coal per gallon of Methanol generated and Case 3 requires
9.27 MMBtu of natural gas per gallon of Methanol generated.
Given the relatively higher cost per MMBtu of natural gas compared to coal and the similar
energy input requirements of the conversion process, a 100 percent increase in natural gas prices
leads to a 50 to 55 percent increase in RSP, for commercial and loan guarantee financing
respectively. However, the same increase of 100 percent in coal prices leads to a 13 to
16 percent increase in RSP for the same financing structures, respectively. These results are
consistent with the natural gas–based methanol production being the less capital intense but more
operating margin dependent technology choice. Hence, the natural gas route is more exposed to
feedstock price volatility.

Exhibit 4-12 Sensitivity of the required selling price to the coal price
3.00
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.50
QGESS
PRB Coal Price
$36.57/ton
($2.14/MMBtu)
2.00

1.50

63
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Exhibit 4-13 Sensitivity of the required selling price to the natural gas price
3.00
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.50
QGESS
Natural Gas Price
$6.13/MMBtu

2.00

1.50

64
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

The heat recovery from the exothermic methanol synthesis reaction combined with burning the
excess tail gases in a combustion turbine result in a substantial amount of excess electricity being
generated in the natural gas case. If this electricity is sold, the revenue is applied to the cash
flow and results in a lower RSP. The sensitivity of the RSPs to the selling price of electricity is
illustrated in Exhibit 4-14. The RSPs for the coal feedstock cases remain constant but are shown
for comparison. The RSPs for the natural gas feedstock case decease by approximately
0.08 cents per gallon for each dollar per MWh increase in electricity selling price.
While the excess power can be sold to the grid; the sale may be at a steep discount as entities that
are negotiating a power purchase agreement will know the power production is an inherent by-
product of core methanol production operations. Consequently, the actual achieved transfer
price for excess power will be a significant risk in natural gas feedstock projects and would be
highly project dependent. However, as shown in Exhibit 4-14, the impact of reduced electricity
revenues has a fairly small impact on the methanol RSP. Decreasing the electricity sell price to
$0/MWh only increases the methanol RSP by about $0.05/gal.

Exhibit 4-14 Sensitivity of the required selling price to the electric selling price
3.00
Loan Guarantee Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.50
Commercial Fuel Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
2.00

1.50

1.00

0.50 $59.59MWh

0.00
0 20 40 60 80 100 120 140
Electricity Selling Price ($/MWh)

Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

65
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Options for carbon dioxide sequestration include both storage in a saline reservoir (i.e., carbon
capture and sequestration (CCS)) and usage in enhanced oil recovery (EOR) (i.e., carbon
capture, utilization and storage (CCUS)). The EOR option may be attractive even without the
passage of carbon regulations. The impact of selling the captured CO2 for EOR or other uses at
various plant gate sale prices was estimated, and the results shown in Exhibit 4-15. The
horizontal lines represent the without-capture case RSP values. As the plant gate sale price
increases, the RSP values decrease and approach the without-capture values. The plant gate sale
price at the point where each capture case line crosses the corresponding without-capture line is
equal to the cost of CO2 captured for that capture case. The cost of capture can be interpreted as
the breakeven plant gate sale price where the cost of capture equals the revenue generated by
selling the recovered CO2.

Exhibit 4-15 Sensitivity of RSP to CO2 plant gate sales price

3.00
Loan Guarantee Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

2.50
Commercial Fuel Structure
Case 1 - Shell Coal to Methanol w/o CO₂ capture
Case 2 - Shell Coal to Methanol w/ CO₂ capture
Case 3 - NG to Methanol w/ CO₂ capture
2.00

1.50

1.00

0.50

0.00
0 10 20 30 40 50 60 70
CO2 Plant Gate Sales Price, $/Tonne

Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

66
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

The capacity factor was assumed to be 90 percent for the cases in this study. The sensitivity of
the RSP to the capacity factor is illustrated in Exhibit 4-16. The RSPs for the coal cases increase
at a faster rate than the natural gas cases as the capacity factor falls because the coal-based cases
have more dollars of capital underutilized when the capacity factor is reduced.

Exhibit 4-16 Sensitivity of the required selling price to the capacity factor
14.00

Loan Guarantee Structure

Case 1 - Shell Coal to Methanol w/o CO₂ capture

12.00
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

Case 2 - Shell Coal to Methanol w/ CO₂ capture

Case 3 - NG to Methanol w/ CO₂ capture

Commercial Fuel Structure

10.00
Case 1 - Shell Coal to Methanol w/o CO₂ capture

Case 2 - Shell Coal to Methanol w/ CO₂ capture

Case 3 - NG to Methanol w/ CO₂ capture

8.00

6.00

90% Capacity Factor

4.00

2.00

0.00
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Capacity Factor, %

Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

67
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

Two financial structures were assumed for calculating RSPs in this activity as described in
Section 4.1.4. These structures are based on typical values for fuel projects with and without
loan guarantees or government subsidies. The assumed values were used in the PSFM to
establish capital charge factors (CCF), the portion of the total overnight capital cost to include in
the annual cost of producing a product, for each financial structure. The sensitivity of the RSP to
the CCF is illustrated in Exhibit 4-17. The RSP values were calculated for CCFs ranging from
10 percent to 35 percent (the value estimated for a project assuming 100 percent equity and
20 percent internal rate of return on equity). The RSP values calculated for a CCF of
12.4 percent (the value estimated for a high risk investor-owned utility (IOU) project assuming
45 percent debt at 5.5 percent interest and 55 percent equity and 12 percent internal rate of return
on equity) are also included in the chart. The RSPs for the coal cases increase at a faster rate
than the natural gas cases as the capital charge factor increases because the coal-based cases have
more dollars of capital to be included in the cost of production. The coal case values increase by
approximately 5 cents per gallon for each one absolute percent increase in the capital charge
factor. The natural gas case values increase by approximately 2 cents per gallon for each one
absolute percent increase in the capital charge factor. Loan guarantees and/or government
subsidies could reduce the RSPs for the coal-based cases closer to the values of commercial
natural gas cases.

Exhibit 4-17 Sensitivity of the required selling price to the capital charge factor

3.00
Case 1 - Shell Coal to Methanol w/o CO₂ capture
21.8% Capital Charge Factor
Case 2 - Shell Coal to Methanol w/ CO₂ capture
for Commercial Fuel Structure
Required Selling Price (RSP), $/gal crude methanol. June 2011$s

Case 3 - NG to Methanol w/ CO₂ capture

2.50

17.0% Capital Charge Factor

for Loan Guarantee Structure
2.00

1.50

1.00

35.0% Capital Charge Factor

for 100% Equity @ 20% IRROE
0.50
12.4% Capital Charge Factor
for High Risk IOU

0.00
0% 5% 10% 15% 20% 25% 30% 35% 40%
Capital Charge Factor, %
Based on Methanol density of 332.6 gal/tonne or 301.73 gal/ton

68
Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

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Baseline Analysis of Crude Methanol Production from Coal and Natural Gas

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Common questions