Thursday July 16, 11:21 AM
China body proposes curbs on Shell's coal-gas tech
BEIJING, July 16 (Reuters) - A China industry body has proposed limiting any further purchase of Royal Dutch Shell (Amsterdam: RDSA.AS - news) 's coal gasification technology after teething problems at half the plants, but Shell (LSE: RDSB.L - news) said the glitches were not its fault.
Chinese firms have acquired 19 technology licences from Shell since 2001 in their bid for a share of the growing market for the clean utilisation of coal, which powers around three quarters of the world's third-largest economy. Coal gasification has yet to be widely adopted on a commercial scale.
But the China Petroleum and Chemical Industry Association said on July 15 in a report on its website (www.cpcia.org.cn) that 12 units in operation in 11 companies, including refiner and gas producer Sinopec, have all been troubled by unsteady performance. A total of 23 units are now running.
Local firms have encountered a lack of support in trial runs, while some components, most of which had to be imported, were easily damaged and costly to replace, the report said.
Shell (China) Limited denied there were flaws in its technology.
'Our internal analysis showed that around two-thirds of reliability problems in China were caused by issues outside of the Shell Coal Gasification Process,' Lusha Li, Shell China's communication manager, said in an email response to Reuters questions.
'Fluctuations of coal feed, sometimes on an hourly basis, have impacted SCGP reliability for some clients, but when clients learned how to better guard their feedstock consistency, the reliability and run lengths went up significantly.'
An unnamed official with China's National Energy Administration was quoted as saying in the report that the association had proposed restrictions on technology imports and suggested speeding up manufacture of the components locally.
'It is okay to introduce Shell's coal gasification technology in terms of meeting domestic demand and developing technology, but it is inappropriate to have a widespread rush by jumping on the bandwagon,' the association said in the report.
'The government should step up controls, restricting the repeated use of Shell's immature technology and encourage domestic firms and research institutes to strengthen adoption and innovation of imported technologies.'
Shell's Li said the company only licenses its technology and does not directly control equipment design and construction.
'SCGP performance can also be impacted by clients' quality control in equipment designing and construction, as well as operational discipline once the unit is started up.'
To address industry complaints about expensive operating costs, Li said Shell had approved a local vendor as coal burner supplier, and was working towards qualifying a number of other vendors to supply locally-produced components to reduce costs.
Li declined to say if Shell had responded to the association or addressed the issue with relevant government departments.
(Reporting by Jim Bai and Chen Aizhu; Editing Jonathan Leff)
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
