Full steam ahead for Australian coal gasification project

Plans for Australia's first commercial coal gasification project have moved forward with an A$40m (US$33.6m) investment from South Korean conglomerate Samsung Corp.

The funding completes the A$500m in total equity sought for the coal-to-fertiliser plant in Western Australia state by Perdaman Industries – a Perth-based company headed by Indian industrialist Vikas Rambal, which is also investigating installing carbon capture technologies at the "clean coal" facility.

Perdeman is developing the project at a total cost of A$3.5bn, of which A$2bn is expected to come from loans.

Samsung has been awarded the lead engineering contract for the sub-bituminous coal-to-urea facility which is to be located near Collie, 213km south of Perth. Construction is to start by end-2010, with urea production commencing in 2013.

Collie is Western Australia's most important coal mining town, with about two billion tonnes of coal reserves, of which an estimated 600 million tonnes can be successfully extracted.

Local coal will be used at the gasification plant, where it will be converted to gas before being turned into urea, in the form of white crystalline solid.

The facility will have an annual capacity of at least two million tonnes, with most of the output destined for export. Perdaman estimates that sales of the product to India and other Southeast Asian countries will generate A$850m per year.

The company claims that a high percentage of the carbon dioxide emitted by the plant will be "99.5 per cent pure". Perdaman says it is also seeking out potential sites for the sequestration of CO2 from the facility.

However, the fact that Perdaman has not yet fully committed to the sequestration of carbon emissions from the plant has caused Western Australia’s Conservation Council – an umbrella body of the state's conservation groups – to express concern over its potential to raise greenhouse gas output in the area.