Are you aware of the 9 key coal-to-natural gas projects in Xinjiang?
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China’s first synthetic natural gas (SNG) project was completed in 2013. Using coal as raw material, the first and second phases of Datang Keqi, Xinjiang Qinghua, Zhejiang Energy Xintian, and the first and second phases of Inner Mongolia Huineng projects have been completed to date, with a total production capacity of 7.495 billion cubic meters. Currently, the capacity utilization rate for coal-based SNG is 100%, and the entire industry has achieved profitability. A summary of the latest progress on 9 key coal-to-natural gas projects in Xinjiang: 1. The 4 billion cubic meters per year coal-to-natural gas project at Tiaohu, operated by China National Coal Group Corporation. China National Coal Energy Group Co., Ltd. (referred to as “China National Coal Group”) will build a coal-to-natural gas facility with an annual production capacity of 4 billion cubic meters in the Santanghu Industrial Park in Bariqun County, Hami. This project relies on the No. 1 shaft mine at Zhongmei Tiaohu to produce syngas through gasification and purification; thereafter, natural gas is generated via methane synthesis units and delivered via pipeline networks. At the same time, this project integrates large-scale green power facilities to produce 20,000 cubic meters per hour of green hydrogen, thereby reducing the energy consumption and CO2 emissions of coal-based chemical projects with high energy demands; it also includes a renewable energy generation facility capable of producing 400,000 kilowatts of power through wind and solar power. The project is designed to process 10 million tons of raw coal per year, with a total investment of around 32 billion yuan. 2. **Energy Group’s 4 billion cubic meters per year coal-to-natural gas project in Zhundong** – Energy Group’s Xinjiang branch plans to build a coal-to-natural gas project in the Zhundong area. The total construction capacity is 4 billion cubic meters per year, with a total investment of around 25.037 billion yuan. The project covers an area of approximately 400 hectares, and it is capable of processing 16.12 million tons of raw coal locally each year. All key stages of the project utilize domestic processes and equipment, resulting in the establishment of a demonstration project for a complete set of domestic coal-to-natural gas technology systems. The gasification technology employs a combination of pressurized coal gasification and pressurized pulverized coal gasification; the air separation unit makes use of advanced domestic air separation technologies and equipment ； The shift conversion will adopt a mature domestic medium-pressure sulfur-resistant shift process ； Low-temperature methanol washing, a mature technology in China, is planned to be used for desulfurization and decarbonization. The methane synthesis process is planned to utilize the methanation technology developed by the Dalian Institute of Chemical Physics in China. For flue gas desulfurization in this project, the high-temperature Claus reaction inside the furnace combined with the ECOSA® process is planned to be used, while for nitrogen oxide control, clean fuel gas, ultra-low NOx burners, and flue gas recirculation technology will be employed to ensure compliant emissions. Under normal operating conditions, all treated production wastewater is reused after being separated by type. The project also includes plans to build 1,000 MW of wind and solar power generation facilities, as well as 1 GW of photovoltaic power plants for hydrogen production, combined with carbon capture, utilization, and storage (CCUS) technology, in order to reduce coal consumption and lower carbon dioxide emissions. The content of the project construction shall be based on the final version of the feasibility study report provided by the project owner. On January 8, 2024, an invitation for bids was issued for the services related to the preparation of the environmental impact assessment report for the 4 billion cubic meters per year coal-to-natural gas project operated by **Energy Group Xinjiang Energy Co., Ltd. in Zhundong.
3. Xinjiang Energy Group’s project to produce 4 billion cubic meters of coal-based natural gas per year: The coal chemical project at the Santanghu mining area, carried out by Xinjiang Energy (Group) Co., Ltd. (referred to as “Xinjiang Energy Group”), is one of the key projects outlined in Xinjiang Energy Group’s 14th Five-Year Plan; an investment of 50 billion yuan is planned for this project. The Shitoumei No.1 open-pit coal mine of Xinjiang Energy Group is the only coal mine that has been built and put into operation in the Santanghu mining area. Its approved production capacity is 15 million tons per year, and the coal features low ash content, high calorific value, and low levels of harmful elements, making it possible to provide a high-quality and sufficient supply of coal for coal chemical projects. The coal-to-natural gas project of Xinjiang Energy Group, with an annual production capacity of 4 billion cubic meters, is located in the coal chemical industry base in Tiaohu District, Bariqun, Hami City, Xinjiang, with a total investment of around 30 billion yuan. In September 2022, an expert review meeting for the pre-feasibility study report of Xinjiang Energy (Group) Co., Ltd.’s 4 billion cubic meter coal-to-natural gas project, hosted by China International Engineering Consulting Corporation, was held in Beijing. After completing all the stages of feasibility study for the project, it moves on to the expert review phase. The meeting heard a report on the preparation status and outcomes of the pre-feasibility study for this project, and conducted a comprehensive review of the report through methods such as reviewing relevant materials and holding group discussions. Throughout the review process, the leaders and expert group presented their arguments in a structured manner, from insightful perspectives with clear viewpoints. Both the reviewers and the compilers engaged in constructive and detailed discussions and exchanges regarding various issues in the pre-feasibility report. The preparation of this pre-feasibility report was carried out by Saiding Engineering Co., Ltd. This meeting marks substantial progress in the preliminary work for Xinjiang Energy Group’s coal-to-natural gas project, laying the foundation for subsequent tasks such as feasibility studies and design. 4. Henan Energy Group’s project to produce 4 billion cubic meters of coal-to-natural gas per year: During the 14th Five-Year Plan period, Henan Energy Group plans to invest 20 billion yuan in building a facility capable of producing 4 billion cubic meters of coal-to-natural gas per year, as well as projects such as a mine with an annual production capacity of 15 million tons at Jiji Lake. Xinjiang Longyu Energy Zhundong Coal Chemical Co., Ltd. (referred to as “Xinjiang Longyu”) is responsible for the construction and operation of the project; once completed, it will be able to process over 15 million tons of coal on-site. The coal-to-natural gas project will serve as an \"energy island\" for Henan’s future Zhundong Modern Coal Chemical Industry Base. It will give way to a range of high-end chemical products such as coal-to-olefins and biodegradable plastics, thereby making full use of the available resources and achieving clean and efficient production, while also facilitating the local conversion of the region’s abundant coal resources. In November 2023, Henan Energy and Chemical Group Chemical New Materials Co., Ltd. organized an internal review meeting for the \"Feasibility Study Report on the 4 billion cubic meters per year coal-to-natural gas project of Xinjiang Longyu Energy Zhundong Coal Chemical Co., Ltd.\" The evaluation expert group conducted in-depth and detailed discussions on the feasibility study report prepared by Saiding Engineering Co., Ltd., covering aspects such as the current state of the industry, process equipment, electrical instruments, safety and environmental protection, energy conservation and carbon reduction, investment estimates, risk analysis, as well as the availability of coal, water, and electricity resources, and offered many constructive suggestions. The expert group believes that the overall concept of the project, the scale of construction, the site selection, and the main technological approaches proposed in the feasibility study report are generally reasonable and feasible. Saiding Engineering Co., Ltd. will promptly revise and improve the feasibility study report in light of the suggestions put forward by the expert group. The successful holding of the internal review meeting laid a solid foundation for the further advancement of this project.
5. The Tianchi Zhundong coal-to-natural gas project in Xinjiang, with an annual production capacity of 4 billion cubic meters. Xinjiang Tianchi Energy Co., Ltd. (referred to as “Tianchi Energy”) is a large-scale energy enterprise established by TBEA as part of its strategy to utilize the region’s abundant resources; it is a high-tech enterprise at the ** level, with total assets exceeding 10 billion yuan. Leveraging its advantageous coal resources to expand the industrial chain, it has evolved into a large-scale comprehensive energy enterprise covering three sectors: coal, power, and logistics. The company integrates large-scale open-pit coal mining and processing, large-scale thermal power generation, urban heating, electricity and heat sales, as well as integrated logistics services. It holds the exploration rights for four coal mines: the South Open-Pit Coal Mine and the North Open-Pit Coal Mine in the Zhundong Dajing mining area of Xinjiang, as well as the No. 1 and No. 2 Open-Pit Coal Mines in the Xizhidi Heishan mining area of Xinjiang; the total proven coal reserves amount to 12.6 billion tons. The Nan Open air Coal Mine is included among the “23 key projects launched as part of the Western Development Initiative”. It is a coal mine that meets first-class standards for safety production, and it has been transformed into a green, digital, and intelligent mine with an annual production capacity of 30 million tons. The approved production capacity of General Gobi No. 2 open-pit coal mine is 20 million tons per year, and it has now reached full capacity. In September 2023, Tianchi Energy’s Qudong project, which has an annual production capacity of 4 billion cubic meters of coal-to-natural gas, made its environmental assessment information public for the first time. Using coal as the raw material, this project involves the gasification of slag in a fixed-bed reactor; the resulting gas is then purified through methanol washing to produce syngas. The syngas is subsequently used in methanation processes to generate synthetic natural gas (SNG). Additionally, necessary storage and transportation systems, utility facilities, auxiliary production equipment, as well as environmental protection measures are also installed. 6. Xinjiang Qiya’s project to produce 6 billion cubic meters of coal-to-natural gas per year: Xinjiang Qiya Chemical Co., Ltd. (referred to as “Xinjiang Qiya”) plans to invest 40 billion yuan in building a new facility capable of producing 6 billion cubic meters of coal-to-natural gas per year. This project will be developed by the Qiya Group, with an emphasis on achieving high standards in terms of sophistication, intelligence, and sustainability. The facility will use local coal as raw material to produce synthetic natural gas, adhering to standards of first-class equipment, excellent environmental protection practices, and high efficiency. The site is planned to be located at the mine entrance in the Zhundong Economic and Technological Development Zone in Xinjiang, about 200 kilometers away from Urumqi, and will consist of process units as well as auxiliary public utility systems. Upon completion of this project, it is expected to generate annual operating revenue of around 18 billion yuan, pay various taxes and fees in the amount of about 1.3 billion yuan per year, and create more than 2,000 new jobs. At the same time, this project offers significant carbon reduction benefits, enabling direct CO2 emission reductions of around 1.375 million tons per year, which is no less than 20% of the total carbon emissions. Upon completion, the project will become a modern first-class coal chemical industry base in China, featuring large scale, high quality, and excellent efficiency. In October 2023, a review meeting was held for the feasibility study report of Xinjiang Qiya’s project to produce 6 billion cubic meters of coal-based natural gas per year.
7. The second phase of Xinjiang Qinghua’s project to produce 5.5 billion cubic meters of coal-to-natural gas per year. Xinjiang Qinghua Energy Group Co., Ltd. (referred to as “Xinjiang Qinghua”)’s project for producing 5.5 billion cubic meters of coal-to-natural gas per year was the first coal deep-processing demonstration project approved by the National Development and Reform Commission during the 12th Five-Year Plan period. The first phase of this project, with an annual production capacity of 1.35 billion cubic meters of coal-to-natural gas, was completed and put into operation at the end of 2013; it has since supplied over 8.4 billion cubic meters of high-quality natural gas to the West-East Gas Transmission pipeline network on a steady basis； In 2018, Xinjiang Qinghua was designated by the National Development and Reform Commission as a key supplier of natural gas during winter, having supplied over 2.5 billion cubic meters of natural gas to date. Phase 2 is a coal-to-natural gas project with an annual production capacity of 4 billion cubic meters, divided into Series A and B, each with a capacity of 2 billion cubic meters. The total investment amounts to 19.4 billion, and the planned construction period is 3 years. The Xinjiang Qinghua coal-to-natural gas project is one of the first undertakings in China’s coal-to-synthetic natural gas industry. Since its operation, the project has successfully completed the demonstration tasks related to the **\"4.0MPa fixed-bed coal gasification technology\" and \"advanced wastewater treatment and reuse technology\", achieving the goal of zero wastewater discharge ； In July 2022, a new domestic methanation catalyst was put into use in place of the existing catalysts in the Qinghua plant in Xinjiang, marking independent innovation in China’s coal-to-gas technology and processes, and removing the biggest obstacle to the full localization of such equipment. In March 2023, industry experts organized by China International Engineering Consulting Corporation conducted a feasibility study review for the second phase of Xinjiang Qinghua’s project to produce 5.5 billion cubic meters of coal-to-natural gas per year. This marked substantial progress in the second phase of this project, and it also meant that Xinjiang Qinghua would take the lead in promoting the localization of key technologies and core equipment in the coal-to-natural gas industry. In July 2023, an on-site assessment team organized by the China Petroleum and Chemical Industry Federation arrived at Xinjiang Qinghua to conduct a five-day on-site assessment of the 1.375 billion cubic meter coal-to-natural gas **pilot project, which is part of the first phase of Xinjiang Qinghua’s project aimed at producing 5.5 billion cubic meters of coal-to-natural gas per year. The on-site assessment will play a positive role in promoting the initiation and construction of the Phase II project of Xinjiang Qinghua. 8. Xinye Coal Chemical’s coal-to-natural gas project: In April 2023, Xinye Coal Chemical (Shanshan) Co., Ltd. held its founding meeting as well as the first shareholders’ meeting, the first board of directors meeting, and the first meeting of the supervisory board, marking the official establishment of the company. Xinye Coal Chemical (Shanshan) Co., Ltd. has a registered capital of 100 million yuan, and is 100% controlled by Xinjiang Xinye State-owned Assets Operation (Group) Co., Ltd. We will focus on transforming Xinjiang’s abundant strategic coal resources into advantages for high-quality economic development, make every effort to build a coal chemical industry framework, take the lead in promoting the development of coal chemistry in the autonomous region, actively work with relevant government departments, coordinate the resolution of various issues, and accelerate the implementation of related projects. At present, Xinye Coal Chemical (Shanshan) Co., Ltd. has begun the preliminary work by engaging specialized agencies to plan and design projects for the clean and efficient utilization of coal resources in the Kumtag mining area of Shanshan County. The goal is to develop a distinctive model for the efficient, high-quality, and clean use of coal resources, to create a portfolio of products with core competitive advantages as well as a sustainable industrial framework for the company, thereby turning this site into the second modern coal chemical industry base for the Xinye Group. At the recently held New Industry Group-wide strategic planning seminar, leaders of New Industry Group and its subsidiaries stated that currently, as a **\"three bases and one corridor\"**, Xinjiang is seeing orderly progress in the development of its \"eight major industrial clusters.\" The coal chemical industry, with coal-to-gas production as its main focus, is at an opportune time to develop, and New Industry Group has great potential in advancing this sector of coal-to-natural gas production ； Building coal-to-natural gas projects allows for the use of existing West-East Gas Transmission pipelines to transport gas from Xinjiang to the eastern coastal areas. This not only improves the actual utilization rate of those pipelines but also enables the large-scale exploitation and on-site conversion of coal resources, holding significant exploratory value and practical importance. 9. Itai Yili Coal-to-Natural Gas with Coupled Hydrogenation Gasification Project: The original 1 million tons per year coal-to-oil demonstration project of Itai Yili Energy Co., Ltd. is located in the Itai Yili Industrial Park, Chabuchar County, Ili Prefecture, Xinjiang Uygur Autonomous Region. Yahua Consulting has learned that the company plans to optimize its product offerings by establishing a new project for the production of 2 billion cubic meters per year of coal-based natural gas through coupled hydrogenation and gasification processes. In October 2023, the winning bidder for the technical service contract related to the environmental impact assessment report for the optimization of the product scheme of Yitai Ili Energy Co., Ltd.’s 1 million tons per year coal-to-oil demonstration project was announced to be China Kunlun Engineering Corporation.