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Siemens Acquires Sustec-Group Coal Gasification Business

Posted on May 16, 2006

The Siemens Power Generation Group (PG) announced the expansion of its power plant business with products and solutions for conversion of coal to electricity by acquiring the technology and engineering activities of the Sustec-Group. The acquisition comprises, inter alia, the German firm Future Energy GmbH, as well as a 50% stake in the Chinese joint venture with the Shenhua Ningxia Coal Group. By this acquisition, Siemens is securing a key technology for environment-friendly power generation. To accelerate development and testing of the next gasifier generation, Siemens also plans to build a large-scale coal gasification plant with an overall thermal capacity of more than 1000 MW at the location Spreetal in Saxony. Approval from the anti-trust authorities for the acquisition of the Sustec-Group is still pending. Financial details of the transaction were not disclosed.

In addition to a wide range of coal grades, the Sustec-Group process known as GSP entrained flow gasification can also utilize biomass, as well as petroleum coke and refinery residues as feedstocks. In line with the globally increasing demand for energy and raw materials, an attractive growth potential is now emerging for advanced coal gasification technology. In recent months, several contracts for large-scale coal gasification projects were already awarded to the Sustec-Group, three of which are located in China.

With the planned coal gasification plant in Spreetal, which is to have an overall thermal capacity in excess of 1000 MW, Siemens intends to enter a new output class. After completion of construction and the subsequent test phase, the plant is scheduled to start commercial production about three years from now. The syngas produced will be used for power generation and production of roughly 600 000 tons of methanol per year.

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