By Angela Macdonald-Smith
Dec. 2 (Bloomberg) -- Royal Dutch Shell Plc and Anglo American Plc put on hold plans to develop a A$5 billion ($3.2 billion) coal-to-liquids project in Australia, citing a rise in capital spending estimates and “escalated” construction costs.
The partners will extend studies into the proposed project rather than move forward with development, Roger Bounds, project director at the venture company Monash Energy Holdings Ltd., said in an e-mail. The project was the first to be nominated for development under a clean coal energy alliance formed in May 2006 between Europe’s biggest oil company and the world’s fourth-biggest diversified mining company.
Australia’s Resources Minister Martin Ferguson has been promoting the development of an industry for the conversion of coal and natural gas into cleaner transport fuels to improve security of supply. Australia’s trade deficit in oil and refined fuels reached a record A$12.5 billion in the year ended Sept. 30, EnergyQuest, an Adelaide-based consulting firm, said yesterday.
“Monash Energy and its owners Shell and Anglo American believe that, in the long term, coal-to-liquids may provide an opportunity for Victoria to provide domestically produced clean liquid fuels for Australia and international markets,” Bounds said in an e-mailed response to questions that were relayed by Shell. “However, at this stage, critical requirements for the project are not yet in place.”
Bounds couldn’t be reached for further detail. Peter Batchelor, energy and resources minister in Victoria state, in August last year put the cost of developing the project at A$5 billion.
Carbon Capture
The partners planned to invest almost A$20 million in the two years from September 2006 on technical and commercial studies to identify the best way to set up the plant, according to a June 2008 information sheet on the Monash Energy Web site.
Michael Bradley, a spokesman for Ferguson, declined to comment. Emma Tyner, a spokeswoman for Batchelor, said she couldn’t immediately comment.
The Monash project involves converting brown coal from Anglo’s deposits in the Latrobe Valley 160 kilometers (99 miles) east of Melbourne into synthetic gas for processing into zero- sulfur synthetic diesel. Carbon dioxide emitted during the process would be extracted in a concentrated stream for transport to underground injection wells using a carbon capture and storage technology.
In submissions to government policy reviews, Monash has been calling for greater funding from the Australian government for carbon capture and storage projects and for exemption from the nation’s proposed carbon trading system to help boost project economics.
Shell and Anglo are among eight companies that last week joined as founding members of Australia’s A$100 million carbon capture and storage institute aimed at accelerating low- emissions power generation. Brown coal, the primary energy source in Victoria state for electricity production, emits more greenhouse pollution when burnt than the black variety.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Posts
No comments:
Post a Comment