Mitsubishi gets order at Parish CO2 project; construction starts

Mitsubishi Heavy Industries Ltd. (MHI) has received an order for the world’s largest post-combustion CO2 capture system for the enhanced oil recovery (EOR) project in Texas, which is primarily backed by NRG Energy (NYSE: NRG) and JX Nippon Oil & Gas Exploration Corp

MHI said July 15 that the system will capture CO2 from flue gas from an existing coal-fired power generation plant and will have a CO2 capture capacity of 4,776 metric tons per day (mtpd). The system is slated for completion in the fourth quarter of 2016.

MHI received the CO2 capture system order from Petra Nova CCS I LLC, a special purpose company of NRG and one of the companies implementing the project, through Mitsubishi Heavy Industries America (MHIA), a wholly owned subsidiary of MHI.

The consortium partner of MHIA in receiving order from Petra Nova CCS I is TIC – The Industrial Company, a heavy industrial contractor. JX Nippon has participated in the project by purchasing a 50% membership interests of Petra Nova Parish Holding LLC, the company that previously owned all the membership interests of Petra Nova CCS I.

The EOR project involves the separation and capture of CO2 from flue gas emitted from Unit 8 of NRG’s W.A. Parish coal plant, located approximately 60 kilometers southwest of Houston, Texas, and injection of the CO2 into nearby West Ranch oil field to boost crude oil production. The project is getting U.S. Department of Energy funding help.

The CO2 capture system will consist of a flue-gas quencher, absorber and regeneration system, CO2 compression unit, and utility facilities. It will have a CO2 capture efficiency of 90%. MHI will license CO2 capture technology to Petra Nova CCS I through MHIA. The MHIA/TIC consortium will undertake engineering, procurement and construction (EPC) of the CO2 capture system and its ancillary facilities.

MHI’s CO2 capture technology is the KM CDR Process, which uses a proprietary KS-1 TM high-performance solvent for CO2 absorption and desorption that was jointly developed by MHI and Kansai Electric Power. Compared with other CO2 capture technologies, this process uses significantly less energy. The process has been adopted in many CO2 capture plants in Japan and abroad, making MHI the leader in this industry, the company said.

In the area of CO2 capture from coal-fired flue gas, which requires highly sophisticated technology due to various impurities contained in the flue gas, MHI said it has already established an impressive track record.

For instance, MHI has conducted small-scale demonstration testing for CO2 capture from coal-fired flue gas at 10 mtpd since 2006, in cooperation with Electric Power Development Co. Ltd. (J-POWER) and completed the verification of uninterrupted table operations.

More recently, the 500 mtpd CO2 capture demonstration test for capturing and sequestering CO2 from emissions at the Barry coal-fired power plant, conducted jointly by MHI and Southern Company Services in the U.S., was completed in December last year, achieving initial phase targets. Based on these results, MHI has been promoting its commercial applications.

NRG begins construction at Parish site

Separately on July 15, NRG Energy announced that it has begun construction on the project.

“Our objective is simple: we want to continue to provide safe, affordable and reliable power to our customers, but without risking the health of the planet as a result of our activities,” said David Crane, President and CEO of NRG Energy. “This project is an enormous step in that direction, plus it continues the trend of enhancing domestic oil production; thus further reducing our national dependence on foreign sources of oil.”

“We are very excited and proud to participate in this epoch-making project in the U.S. which will be able to vitalize the legacy oil fields and to produce a significant amount of oil that might not have been produced without this Project, while reducing the footprint to the global environment at the same time,” said Shunsaku Miyake, President and CEO of JX Nippon Oil & Gas Exploration.

Previously the project was selected by DOE to receive a grant of up to $167m as part of the Clean Coal Power Initiative Program (CCPI), a cost-shared collaboration between the federal government and private industry.

“As part of the President’s all-of-the-above approach to American energy, the Department is advancing the technologies that will help ensure we can continue to develop all of our abundant energy resources responsibly and sustainably,” said DOE Secretary Ernest Moniz. “With coal expected to remain a significant part of the energy portfolio in the U.S. and internationally, first-of-a-kind projects like Petra Nova will move us towards a low-carbon energy future.”

The project is expected to capture approximately 1.6 million tons of CO2 annually from an approximately 240-MW slipstream of flue gas from Parish Unit 8, which has a total net capacity of 610 MW. The CO2 will be compressed and piped through an 82-mile long pipeline to the West Ranch oilfield, the initial field for the Project.

In the CO2 capture system virtually all SO2 will be removed from the processed flue gas. Particulate matter and NOx controls are already on the unit and mercury controls will be installed by 2015 before the capture system becomes operational. The flue gas leaving the CO2-capture system is expected to be among the cleanest fossil fuel emissions in the world.

The Project will be constructed under a fixed-price contract by a consortium of Mitsubishi Heavy Industries Americas and TIC. It is expected that construction of the project will take about two years and the facility will be operational by the end of 2016.

The overall cost of the project, including costs already incurred, is anticipated to be about $1bn. Financing for the project will consist of:

  • Up to $167m from the DOE CCPI grant of which approximately $7m has already been received from the grant in the initial design and engineering phase.
  • Loans of $250m to be provided by the Japan Bank for International Cooperation (JBIC) and Mizuho Bank Ltd., backed by Nippon Export and Investment Insurance (NEXI).
  • Equity contributions from both NRG and JX Nippon of approximately $300m each. NRG’s contribution will include investments already incurred during development of the project which will become assets of the joint venture. This includes the 75-MW, gas-fired peaking unit that will power the CO2 capture system, which achieved commercial operation in June 2013, and the 50% equity interest in Texas Coastal Ventures LLC (TCV), a joint venture with Hilcorp Energy. TCV holds the working interests in the West Ranch oilfield in Jackson County, Texas.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.