Siemens Power Generation has been awarded a contract by Shenhua Ningxia Coal Industry Group Company to supply two entrained-flow gasifiers with a thermal capacity of 500 MW each and further key equipment for a coal gasification plant in China.

SNCG is a subsidiary of the Shenhua Group, the largest Chinese coal producer. The coal gasification plant is to be used for the Shenhua Ningmei DME project in Ningxia Province in northwestern China. When the plant is ready to operate in early 2009, Shenhua Ningmei DME will produce 830,000 tons per year of the clean, environmentally friendly synthetic fuel dimethyl ether (DME). The contract is worth approximately EUR30 million for Siemens.

As a low-cost, widely available fuel, coal is destined to play an important role in meeting the world's future energy needs. From the standpoint of environmental and climate protection considerations, Siemens says techniques like coal gasification and liquefaction are gaining preference. "The order is an important reference for our new generation of gasifiers of the 500 MW class. This will also able us to strengthen our position in China, as the world's most important market for coal gasification as an environmentally friendly technology of the future," Klaus Voges, Group President of Siemens Power Generation, explained.

In addition to being the world's second-biggest energy consumer, China also happens to have some of the world's largest reserves of coal, along with the United States and Russia. Coal is used to satisfy 76% of China's primary energy consumption and 70% of its electricity generation. In view of the country's fast-rising energy consumption and the fact that it does not have ample reserves of crude oil and natural gas, China is investing heavily in the production and processing of coal. Besides being used for power generation, coal is also increasingly being used to produce synthetic gases and as a source of carbon for the chemicals industry.

"The Shenhua Ningmei DME project is the first major coal gasification plant contract that Siemens has been awarded since the acquisition of Sustec," Voges said. Siemens PG acquired Sustec's coal gasification activities in mid-2006 in order to supplement its power plant business with products and services related to coal gasification. In addition to gaining a key technology for the environmentally friendly generation of electrical power based on coal, Siemens PG can also use this technology to produce synthetic fuels and chemical products.

The Power Generation Group of Siemens AG is one of the premier companies in the international power generation sector. In fiscal 2006, which ended September 30, Siemens PG posted sales amounting to more than EUR10 billion and received new orders totaling EUR12.5 billion. Group profit amounted to EUR782 million. On September 30, 2006, PG had a work force of approximately 36,400 worldwide.