China plays vital role in US clean energy project

CHINESE company Sinopec Engineering Group is playing a major role in Summit Power Group’s $2.5 billion Texas clean energy project. By Sarah Byrne

Staff Reporter

Summit intends to award Sinopec the engineering, procurement and construction contract for TCEP’s gasification and chemical block.

With Chinese firms playing a role in constructing the power plant and also financing the project, China is taking a larger role than initially anticipated.

The Export-Import Bank of China is expected to be the sole financial lender to the project.

Summit said the Chexim loan amount would be based on a percentage of the dollar amount of Sinopec’s EPC contact and would adequately satisfy all of TCEP’s financial needs.

TCEP is a commercial coal gasification power/polygen project being developed by Summit and is located in Penwell, Texas, 15 miles west of Odessa.

It sets out to capture 90% of carbon dioxide to be used in enhanced oil recovery by producers in the Permian Basin, Texas.

The project aims to boost US oil production by 7 million barrels per year, resulting in the generation of thousands of jobs in Texas and the US.

The project is to receive $450 million in federal assistance from the US Department of Energy as part of an initiative to promote clean coal projects.

The Wall Street Journal reports US officials are supportive of Chinese investment in TCEP as it highlights an area where both countries can cooperate to develop new technology.

The project includes a 400 megawatt power plant and an adjacent chemical facility, which will be used to turn coal into a clean combustible gas aimed to reduce pollution when the gas is used to generate electricity at the power plant.

TCEP will produce more than 700,000 tons per year of urea as fertilizer for farmers and a long-term 200MW supply of ultra-clean and low-carbon electric power for CPS Energy, the electric and gas utility of San Antonio.

Minnesota-based CHS is purchasing TCEP’s entire urea output which is expected to reduce annual US imports and dependence on foreign urea fertilizer by more than 10%.

TCEP’s estimated total sales of captured carbon dioxide for enhanced oil recovery is 2.5 million tons per year.

The project is expected to be operating by 2017.

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