Chinese natural gas project receives funding

Funding has been raised to finance and construct the first phase of a one trillion cubic feet per year coal to natural gas production facility.

GreatPoint Energy has raised US$1.25 billion from China Wanxiang Holdings to finance the project to be located near Turpan, Xinjiang Uyghur Autonomous Region.

The project will utilize GreatPoint Energy’s proprietary Bluegas technology to produce one trillion cubic feet of natural gas per year. The first phase is expected to begin operation in 2015 with an initial annual natural gas production capacity of 30 billion cubic feet, which will expand to 116 billion cubic feet of annual natural gas output within two years.

China Petroleum and Chemical Corporation (Sinopec), China’s largest company by revenue, has agreed to purchase the natural gas produced from the facility and has announced plans to build a pipeline to deliver the gas to the eastern provinces of China.

The Bluegas hydromethanation technology directly converts coal into pipeline quality natural gas, the cleanest commercial fuel in use globally. GreatPoint Energy’s proprietary technology claims to produce natural gas at the lowest cost in the industry.

Its water consumption is only half of that of competing gasification systems. Inherent in the technology is the ability to capture nearly all emissions, including carbon dioxide, which can be sequestered and used for oil production through Enhanced Oil Recovery.

The technology is especially well suited for arid regions such as Xinjiang. Wanxiang and GreatPoint Energy plan to develop large-scale Bluegas projects at other locations in Xinjiang and in other regions of China using Bluegas technology.