Displaying items by tag: Gas

Egypt: Omar A Mohanna, Chairman of Suez Cement, has announced that the company intends to alter its energy mix to use 20% of its energy from waste recycling and 80% from coal during 2014. He added that the Ministry of Environmental affairs has not announced its position on the use of coal, according to AlAhram News. Previous energy supply shortages have reduced production at Suez Cement to 50%.

In related news, the CEO of the Misr Beni Suef Cement Company revealed that his company has received an official letter from the Egyptian government informing the company that the natural gas supply to their facilities will be completely cut in May 2014. The letter added that the government will supply enough Mazut to the company to operate one production line.

Nigeria: BUA Cement has signed a gas sales and purchase agreement with the Nigerian Gas Company for its subsidiary, the Edo Cement Company. The agreement is for the supply of about 0.9Mm3/day to the Edo cement plant in Okpella, according to managing director Saidu Mohammed.

BUA Group entered the cement industry in 2008 when the Federal Government of Nigeria issued cement import licenses to 13 companies, including BUA, in an effort to bring down its price locally. BUA Cement subsequently purchased a floating cement terminal in 2008 for processing and bagging bulk cement. In 2009 BUA acquired controlling stakes in the Cement Company of Northern Nigeria (Sokoto Cement) and the Edo Cement Company.

Three news stories this week cover the gamut of fuels used by the cement industry in North America.

First we had an example of the changing trends in fossil fuel usage when TruStar Energy announced a deal to supply compressed gas to Argos USA. Then we moved to an example of recycled fuels used in co-processing when chemical waste firm ChemCare trumpeted its 100 million gallon milestone (that's 379,000m³ to the rest of the world) in supplying fuel-quality waste to the Lafarge co-processing subsidiary Systech Environmental. Finally, Cemex rounded off the main fuels groups with renewables, when it released pans to build a US$600m wind farm project in north-east Mexico.

Obviously fossil fuels still dominate in kilns north of the Darian Gap, as they do almost everywhere else, and fuel buyers wouldn't be doing their job properly if they weren't searching for the next best deal. Yet the range here shows a dynamic industry.

Jan Theulen from HeidelbergCement pointed out one example in the US at the recent Global CemFuels Conference held in Vienna. Here, rising landfill prices are increasing opportunities for alternative fuels use alongside changing US Environmental Protection Agency (EPA) permitting for solid recovered fuel. Alternative fuels consultant Dirk Lechtenberg, in an interview with Global Cement Magazine in February 2014, singled out the US as one country that is developing its alternative fuels use. As he explained, "Even though the fossil fuel prices are quite low in the US, the industry is developing supply chains for alternative fuels to be more independent with their fuels sourcing."

This race between cheaper fossil fuels in the US (via shale gas) and increasing development in alternative fuels is fascinating. Specifically: why is it happening now? Gas prices have fallen and demand for cement is returning in the US. The annual mean Henry Hub natural gas spot price in the US fell from US$8.86/million BTU in 2008 to a low of US$2.75/million BTU in 2012. This compares to up to US$15/million BTU in Japan and US$9/million BTU in Europe.

Public environmental pressure made manifest by the policies of the EPA and general increased knowledge about co-processing may be factors for the surge in alternative fuels investment. Long lead times for alternative fuels schemes may be another. Planners making a decision about what fuels mix to pursue in 2008 at the start of the recession might well have bet on alternatives to spread their risk. Yet the cause could be something else, as shale gas takes over higher paying industries, such as electrical generation, and the cement industry continues to be priced out of the leftovers.

Ultimately what burns in a cement kiln comes down to price. Depending on how the shale gas market plays out in North America it would be ironic if 'frackers', the bogeymen of current environmentalists, inadvertently cleaned up the cement industry.

Egypt: Minister of Trade and Industry Mounir Abdel Nour has announced that cement companies can start using coal from September 2014. He added that using coal will save 12.7Mm³/day of natural gas.

In a separate announcement, an official source at the Petroleum Ministry said that the amount of natural gas supplied to cement factories during January and February 2014 dropped by 35% from contracted levels. Total natural gas and mazut (heavy duty fuel oil) levels fell by 23% during the same period. During the second half of 2013 the amount of natural gas supplied fell by 17% from contracted levels with compensation from the use of mazut.

Cameroon: Dangote Cement has signed an agreement with Gaz du Cameroun for the provision of gas for its 1.6Mt/yr cement plant in Douala, Cameroon. Commissioning of the cement plant is planned in January 2014 and the gas supply is scheduled to start in the second half of 2014. Construction at the Douala cement plant was delayed by a land dispute in 2012. The new plant is expected to reduce cement prices in the country.

Russia: Novorostsement has ordered its 12th Jenbacher J624 gas engine from US multinational GE (General Electric). The south-western 2.3Mt/yr Russian cement plant in Novorossiysk is expanding its 33.3MW captive gas power plant.

"In order to increase production capacity, we chose GE's technology since we have already had a successful operating experience with the J624 gas engines. The use of GE's gas engines has allowed us to improve the economic performance of our facility," said Anatoly Ziskel, managing director of the JSC Verhnebakanskiy Cement Plant.

Novorostsement originally installed 11 of GE's 4-MW Jenbacher J624 units in 2011. At the time, the project marked the largest single order of Jenbacher gas engines in Russia and also represents GE's largest J624 power plant project worldwide. Max Motors LLC of Sochi will supply the latest J624 unit for the power plant, which Max Motors designed, built and maintains. The on-site power station uses natural gas provided by a local pipeline.

Egypt: Several Egyptian cement producers have reported how they are coping with gas shortages in the country. Production at South Valley Cement has stopped. The company has announced that the gas supply will resume on 28 June 2013. Alexandria Portland Cement has reported that its plant has not stopped production. Its subsidiary, Beni Suef Cement, has reported that it cannot yet assess the impact of the shortage on production.

The National Cement Company has announced that operations are ongoing on a normal basis and that there are no shortages in gas capacity. Misr Cement Qena has said that its cement plants are operating using Mazut and not natural gas. However, due to a shortage in the supply of Mazut, clinker production has been suspended more than once recently.

Egypt: Jose Maria Magrina, chief executive officer of Arabian Cement Company (ACC), has asked the Egyptian government to help cement producers move to using coal and alternative fuels. In an announcement Magrina explained that ACC is ready to substitute all the natural gas used at its 5Mt/yr cement plant in Ain Sokhna to coal and refuse derived fuel (RDF) and had applied for the necessary government permits to do so on 14 March 2013. However until late May 2013 no answer had been received from the government.

"The investment needed to substitute natural gas or mazot (heavy duty fuel oil) with coal ranges from US$6-8m/Mt, while converting to RDF costs around US$8-12m/Mt. However for private companies to be encouraged to commit to such a huge investment, the government should look into incentivising this initiative by putting together a solid policy that includes governmental support," commented Magrina.

Magrina added that the government should remove the operating license fee imposed on new companies, as this was intended to cover the cost of subsidised natural gas, and that it should be granted an environmental permit. ACC is still waiting for the permit to use coal, which will replace 70% of its gas supply. Once the company is granted the permit, it will be ready to make the conversion by the fourth quarter of 2013.

Since February 2013, energy shortages have caused the cement industry in Egypt a loss of 20% (3.7Mt) in production capacity, while ACC has lost 25% (350,000t) of its cement production capacity in the same period. Losses of over 50% are expected during the summer of 2013. Until late 2010, the Egyptian government encouraged cement producers to switch to using natural gas. However, the current energy crisis has seen the government promote the use of coal and alternative fuels instead.

Egypt: Suez Cement has reported in a filing sent to the Egyptian Exchange that the cement sector in Egypt is facing a drop in natural gas supply below normal levels. However, Suez Cement indicated that deliveries at its plants were not affected due to the group's strategic inventory of clinker.

On 20 January 2013 the Ministry of Trade and Industry announced that it would increase prices of mazut, a heavy, low-quality fuel oil, for the cement and ceramics industries by 50% to US$225/t from US$150/t. This follows a threatened increase in the price of mazut in late December 2012 of 130% that the government exempted cement producers from. However, the government planned to increase the price of natural gas to US$6/mmBtu from US$4/mmBtu at the same time.

Tajikistan: Tajikcement, the largest cement plant in Tajikistan, has stopped production due to a shortage of natural gas according to a report from the Avesta news agency.

"Natural gas is the main fuel for the factory. Partial interruption in the supply of gas caused a decrease in cement production. The factory produced 190,500t of cement in January to November 2012, which is a 60,000t decrease compared to the same period in 2011," said a source quoted by Avesta. He added that gas supplies to the plant in Dushanbe have been interrupted several times in 2012.

Saydakhmad Sharofutdinov, the head of the Tajiktransgas the nation's gas importing company, said that the thermal power plant in Dushanbe was the largest consumer of natural gas in Tajikistan, receiving 100,000m3/day.