Abby L. Harvey
GHG Monitor
7/11/2014
Summit Energy signed two memoranda of understanding this week with Chinese companies to increase collaboration and provide engineering services for Summit’s Texas Clean Energy Project (TCEP) carbon capture and storage venture. TCEP will be a 400MW coal integrated gasification combined cycle facility which will incorporate CCS. The project, when completed, will capture 90 percent of its carbon dioxide emissions, which will be used for enhanced oil recovery in the West Texas Permian Basin.
The project is funded, in part, by a $450 million award by the U.S. Department of Energy’s Clean Coal Power Initiative. The plant would be one of the first to use a poly-generation business model, which allows the plant to produce and sell electricity, captured CO2 for EOR, urea fertilizer and other chemicals for multiple revenue streams.
TCEP to Collaborate with GreenGen on IGCC, EOR
One of MOUs signed this week would align TCEP to share information with GreenGen, China’s premier clean coal plant. The similarities of the projects and complimentary expertise align the companies well to enter into such an agreement, Laura Miller, Director of Projects of the Texas Clean Energy Project’s Summit Team told GHG Monitor. “They have an IGCC already built that uses some of the same technology; they use a Siemens combustion turbine to make electricity off the syngas like we will. So, since there are synergies and similarities they will be helping us commission our IGCC unit and then in return we’ll be doing work with them on enhanced oil recovery, which is new for China,” Miller said. “It’s a very new area for them. Their most well-known clean fossil fuel project is GreenGen and it’s also coal gasification that makes syngas to make electricity but under phase one they never included any carbon capture so phase two which they’re going to start now with us, is the carbon capture aspect of the project.”
HQC to Provide Engineering Services
Under the second MOU signed this week, China Huanqiu Contracting & Engineering Corporation (HQC), affiliated with China National Petroleum Corporation (CNPC) will provide engineering services to TCEP. “HQC is so eager to do the project that our new FEED update was launched today in China, with Siemens and HQC and Summit. That work is being done and expedited and we expect to have financial closing now by June 2015,” Miller said of the MOU. “As soon as we have financial closing we would break ground and we would start construction. Construction would be, I would think, going on in earnest six months from closing.”
HQC will fill the spot formerly held by another Chinese engineering firm, Sinopec. Summit and Sinopec’s agreement fell through due to rising labor costs last year, Miller explained. “They went out and refreshed our pricing and it came in very high last summer because of the Texas oil and gas boom so we were unable to financially close in December which was our goal. We had everything ready. We had the off-take contract for all of our products. We had all our air permits. We had all our equity funding raised. We had our operation and maintenance contracts signed with our contractors. We had our EPC contract signed, everything was done. But when Sinopec asked, which was reasonable, to refresh the pricing when they joined us, the labor costs went sky high because of the oil and gas boom in Texas,” she said.
