HOUSTON (Reuters) - A partnership between a subsidiary of Southern Co (SO.N) and KBR Inc (KBR.N) will market a coal-gasification technology to power companies worldwide, the companies said in a release on Monday.
An alliance between Southern Generation Technologies LLC and KBR LLC will work to sell utilities a technology known as Transport Integrated Gasification, or TRIG, which can be used to gasify low-quality coal to generate electricity while reducing carbon emissions to a level more like a typical natural gas-fired power plant.
Southern Co and KBR developed TRIG technology under a U.S. Department of Energy program.
"Through the development of TRIG technology, we've found a way to preserve coal as an important, low-carbon energy resource for America," said Southern Co Chief Executive Thomas Fanning, in a statement.
Southern's Mississippi Power utility is building an integrated-gasification-combined-cycle (IGCC) plant utilizing TRIG technology and an adjacent lignite mine in Kemper County, Mississippi, at a cost of $3 billion.
Since emission controls are built into the coal-gasification process, the project is expected to have fewer sulfur dioxide, particulate and mercury emissions than traditional pulverized coal technology while capturing at least 65 percent of the carbon dioxide produced, Southern said.
The agreement gives KBR exclusive global licensing rights for power generation in addition to its existing rights in industrial applications of TRIG, said Southern, which will provide engineering and technology expertise.
The partnership hopes that as electric demand grows around the world, the TRIG technology will be attractive to countries seeking to use low-cost, abundant coal resources, like China, India and Asia.
More than half the world's coal reserves consist of lower quality lignite and sub-bituminous coal, Southern said, the type of coal TRIG was developed to use.
China is expected to add more than 300,000 megawatts of new coal-based generating capacity by 2035 while India and other parts of Asia are projected to add more than 100,000 MW, Southern said.
The alliance will "accelerate the adoption of TRIG in the marketplace," said Bill Utt, KBR's chief executive officer.
Only two U.S. utilities are building coal-gasification power plants, Duke Energy (DUK.N) and Southern Co. A handful of projects are in development while dozens of other proposals have been abandoned due to rising costs and the lack of laws to limit CO2 emissions.
Previously, Southern and KBR licensed the technology to the Tian Ming Electric Power Co for a facility under construction in China.
Reporting by Eileen O'Grady in Houston; Editing by Tim Dobbyn