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Petroleum
coke and the coal industry:
Petroleum
coke has made significant inroads into the steam coal industry
over the last few years and will continue to do so for a variety
of reasons. Chief among them is that petcoke can serve as
an excellent, inexpensive product to blend with coal in traditional
coal fired boilers, and, in some newer boilers, can even replace
coal entirely .
What
is it?
Petroleum coke is a byproduct of the Coker refinery process
which upgrades fuel oil by heating it and cracking it to higher
valued gasoline, jet and diesel components.
How
does it compare physically to coal?
Generally there is lower ash (<0.5%), lower moisture (8-10%)
and lower Volatiles (8-10%) than steam coal, resulting in
a much higher heating value, on the order of 14,000 Btu/lb.
There is generally higher sulfur, ranging from about 4 % to
7 %, while the HGI varies from 35 to 75. Most coke produced
is fuel grade, meaning it competes with coal. Some coke is
very low in Iron, Nickel and Vanadium, thereby achieving a
higher value in the aluminum anode industry.
How
does fuel grade coke compare economically to coal?
Production costs associated with petcoke are minimal because
it is a byproduct of the refining process, and prices are
generally determined by the competitive steam coal price.
Pricing is also generally discounted to compensate for sulfur,
HGI and the extra difficulties of the end user managing both
coal and coke inputs. Historical $/ BTU prices of delivered
coke vs coal in North West Europe show coke running about
75% of steam coal, but there is a lot of variation.
How
do refineries value it?
Because coke is a byproduct and the refinery gets such a boost
from the light products from the Coker, refineries would be
willing to run the coker even if they had to pay to dispose
of it. This could continue until the net income from the light
products boost and the petcoke loss, fell well below the value
of fuel oil, a point that is reached when coke loss falls
below $10/ton at the refinery gate.
How
much coke is there and where does it go?
Presently, there is about 60 million tons/yr of coke produced
worldwide, most of it located at coastal refineries in North
and South America. In a few years it will be close to 70 million
tons/yr as new refineries with cokers are being built in the
US, Mexico and Venezuela. Since the Americas are generally
coal exporters, most of this coke is also exported to the
same areas that consume imported steam coal: primarily Japan
and Europe.
Who
buys coke?
Cement plants and power plants are the 2 greatest consumers
of pet coke. There is some limited use as space heating and
in commercial brick kilns in Europe, and a small but emerging
market for met coal blending component for the steel industry.
While the higher sulfur may limit the coke in a coal/petcoke
blend in a plant designed for coal, more recently designed
Circulating Fluidizd Bed (CFB) boilers can burn 100% high
sulphur coke.
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