BP, Rio Tinto plan 2 bln aud clean coal project for Western Australia

BP, Rio Tinto plan 2 bln aud clean coal project for Western Australia

	Published : Mon, 21 May 2007 00:17 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - BP PLC and Rio Tinto said they are beginning feasibility studies and work on plans for the potential development of a 2 bln aud coal-fired power generation project at Kwinana in Western Australia that will be fully integrated with carbon capture and storage to reduce emissions of greenhouse gases.

In a joint statement, the two groups said this will be the first new project for Hydrogen Energy, the new company launched by BP and Rio Tinto last week, subject to regulatory approval.

They said the planned project will be an industrial-scale coal-fired power and carbon capture and storage project.

It will generate enough electricity to meet 15 pct of the demand of southwest Western Australia, while each year capturing and permanently storing about 4 mln metric tons of carbon dioxide which otherwise would have been emitted to the atmosphere.

The project will gasify locally-produced coal from the Collie region to produce hydrogen and carbon dioxide. The hydrogen will be used to fuel the power station and around 90 pct of the carbon dioxide would be captured and stored permanently in a deep underground geological formation.

The statement said the costs of low-carbon hydrogen-fuelled power generation are higher than those of traditional power generation.

'For the project to be economic and able to compete effectively in the electricity market, it would require appropriate policy support and a regulatory environment which recognises and encourages the low-carbon benefits it can deliver,' it said.

Subject to the successful outcome of detailed engineering and commercial studies, and providing government policy is in place to make the project commercially viable, a final investment decision to develop the project could be made in 2011, with the project coming into operation after a three-year construction period.

(1 usd = 1.21 aud)

bruce.hextall@xfn.com

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