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?
As of early 2012 there was about 100 million metric tons of pet coke produced worldwide, much of it in coastal refineries in the Americas. The fuel grade portion, (about 75 million metric tons) is mostly used it is used in steam coal importing areas such as China and India (the 2 largest coal consuming nations in the world), Japan, Northern Europe and other developing countries with ability to import. Most US produced fuel grade pet coke (especially from coastal refineries) is exported, but there are a few domestic US cement plants and power plants that can handle the pet coke higher sulfur.
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 sulfur coke.