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$7B Northwest Methanol Plant Developer Seeks to Slash Water Use as Permitting Sweetener

Just beginning a 12- to 18-month permitting process for its first of three proposed natural gas-based methanol plants, Northwest Innovation Works (NWIW) said Wednesday it has started the scoping period in the state environmental policy act (SEPA) process, and has addressed public concerns about water use.

Abundant North American natural gas and plentiful, inexpensive electricity supplies in the hydroelectric-dominated Northwest have been driving the two-year-old proposal for a series of methanol plants for export that collectively represent $7 billion in investment and 14.4 million metric tons of methanol annually.

NWIW engineers have come up with design modifications that will allow water use to be cut 28% in the proposed plants, which were once estimated to need 10,000 gallons/minute (gpm). That volume is now calculated at 7,200 gpm.

"This substantial reduction underscores the company's commitment to identifying technological and design components that reduce local environmental impacts of the plant while providing a more environmentally responsible production method for products used in everyday life," said Simon Zhang, CEO of Chinese-owned NWIW. "We're committed to using innovative technology and design."

The lower water use technology will be provided on the three proposed plants, including the largest one on a former Kaiser Steel property at the Port of Tacoma, WA, Zhang said. The new process will maximize treatment and reuse of wastewater.

The City of Tacoma is the lead agency for the development of an environmental impact statement (EIS) under SEPA. The EIS is required to determine the likely environmental impacts of the development. The scoping period began Tuesday and runs through Feb. 17.

Since emerging more than two years ago and gaining federal environmental reviews of a critical gas supply pipeline (see Daily GPI, July 14Jan. 27, 2014), NWIW in September expanded its plans in Tacoma and added financial partners for all three processing plants. As a result, the investment in the planned plant south of Seattle will be doubled to $3.4 billion, according to NWIW.

As an offshoot of the shale gas boom, U.S. methanol production is growing rapidly, with production up to 4.5 million tons annually, compared to less than one million tons just four years ago, according to officials at the Methanol Institute. The three Northwest facilities would triple that output, bidding to collectively produce about 14.4 million tons/year. U.S. methanol consumption is about 6.5 million tons, but China far exceeds that in producing 45 million tons and using more than half of the world's production.

NWIW was created by China-based Clean Energy Commercialization Co., partnering with units of Double Green Bridge and the Chinese Academy of Science Holding Co., along with private investors in H&Q Asia Pacific. NWIW is owned by Chinese management company Shanghai Bi Ke Clean Technology Co. Ltd. whose goal is "to revolutionize the global methanol industry."

Last September, NWIW signed agreements with three partners to support its plans for multiple processing plants in Washington and Oregon. Stonepark Infrastructure Partners, Noble Group and Johnson Matthey (JM) will expand their involvement in the overall plans for the three methanol production facilities, which are aimed at serving the expanding Asian market.

JM provides ultra-low emission (ULE) reforming technology, which increases the production efficiencies for making methanol from natural gas. It reduces each proposed plant's footprint and volumes of carbon dioxide (CO2) emissions. ULE reforming technology reduces emissions by up to 75% when compared to more traditional natural gas-to-methanol processes, NWIW said.

NWIW's proposed plants would combine natural gas with steam and heat to make a synthetic gas including carbon monoxide, CO2, and hydrogen. The syngas is then heated and compressed and run over a catalyst to make a crude methanol that is distilled with large quantities of water.

Methanol would be shipped to China, where it would be converted into olefins, such as ethylene and propylene, which are used in a range of different products.

Two other proposed plants are slated for Port St. Helens in Clatsop County, OR, and across the Columbia River at Port Kalama, WA, both about 50 miles northwest of Portland. Each would produce about 10,000 metric tons/day of methanol, while Tacoma's output is expected to be twice that volume. The Port Kalama site is the furthest along in the development process, NWIW said.

Port Kalama began permitting in Washington state in late 2014, a draft environmental impact state is under way, and a three-year construction process is expected to begin in the fourth quarter of 2016. In comparison, the first phase of construction at the Tacoma site is scheduled to begin in the final quarter of 2017, although the company calls that a "preliminary estimate."

For the Port St. Helens site, permitting is expected to start later in 2016 and would take 12-18 months.

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