The strategic value of modern coal chemical industry in our country is becoming evident

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According to reports by reporters from the Economic Reference News in Ordos City, Inner Mongolia, which is a modern coal chemical industry demonstration zone, years of intensive research and development have led to the maturation of China’s modern coal chemical technologies. These technologies have made it possible to convert coal into various chemical products such as oil, natural gas, olefins, and ethylene glycol, thus opening up a path for the clean and efficient use of coal as a substitute for petroleum. The strategic value of these technologies is becoming increasingly evident. There has been rapid technological advancement in Ordos City; the technologies for producing diesel, naphtha and other petroleum products from coal, as well as chemicals such as natural gas, methanol, olefins (materials like ethylene and propylene), and ethylene glycol, are now mature. Near Wulamulun Town in Yijinhuoluo Banner, Ordos City, stands a large facility that resembles an oil refinery. It is the world’s first and currently the only industrial production line for producing oil through the direct liquefaction of coal, and it has attracted significant attention both domestically and internationally since its construction. The reporter learned that this million-ton capacity plant was built with an investment of over 10 billion yuan by Shenhua Group, and it began operating commercially in 2011. The washed bitumen brought in from nearby coal mines is first turned into powder, and then fed into a 1.2-kilometer-long production line where it undergoes catalytic treatment and other processes. After 24 hours, products such as diesel, naphtha, and liquefied gas that are as clear as mineral water are produced – a truly magical transformation that is astonishing. Hu Qingbin, deputy chief engineer of Shenhua Ordos Coal-to-Oil Branch, said that entering the new century, Shenhua Group has focused on researching and developing technologies for the clean utilization of coal, such as coal-to-oil conversion, and has independently developed complete sets of technologies and catalysts for the direct liquefaction of coal on a million-ton scale. By the end of 2017, the company had obtained 108 invention patents for coal direct liquefaction technology, and its core technologies had been patented in 9 countries and regions including the United States, Russia, and the European Union. This production line achieved successful trial production at the end of 2008, and subsequently was able to operate on a long-term basis in a safe and stable manner; last year it produced 860,000 tons of products such as diesel. The single operating cycle for the production line design is 310 days, while the periods for nearly two operating cycles are 420 days and 410 days respectively, indicating that the technology is becoming more mature. Currently, the construction plans for the second and third production lines are in progress. Modern coal chemical technologies such as coal-to-natural gas and coal-to-olefins are also making continuous progress. The HuiNeng coal-to-natural gas project, with an annual production capacity of 2 billion cubic meters, is located in Yijinhuoluo Banner, Ordos City. It is the second coal-to-natural gas demonstration project approved in China. Since 2015, the first phase of this project, with an annual output of 400 million cubic meters, has been operating safely, stably, and at full capacity for extended periods of time. In May of this year, construction began on the second phase, which will have an annual production capacity of 1.6 billion cubic meters. “Demand for domestic natural gas is strong, and since the project came online, there has been a shortage of liquefied natural gas. ”Liu Jianqiang, general manager of Inner Mongolia HuiNeng Coal Chemical Co., Ltd., said that the company, in collaboration with numerous domestic research institutions, has overcome the technical challenges associated with using thermal coal to produce natural gas. The methane content in the synthesized natural gas can reach 97%, while the purity of liquefied natural gas is 99.9%. For every 1,000 cubic meters of natural gas produced, approximately 2.2 tons of coal are required, and less than 7 tons of water are needed – figures that are better than those initially planned. In addition to products that serve as alternatives to petrochemicals, new advancements are also being made in the technologies for producing new materials such as graphene and carbon fibers from coal. Since 2013, SNOW GROUP has developed a technology for extracting graphene from low-calorific-value coal; the first-phase project for producing 1,000 tons of graphene began construction in Dalaat Banner, Ordos City, this March. Qu Bo, the general manager of the project, said that 1 ton of graphene powder can be produced from 3 tons of low-calorific-value coal. The first phase of the project is expected to come online in August this year, and it will fill the technical gaps in this field in China. After two years of pilot testing, Ego (Inner Mongolia) Coal Chemical Technology Co., Ltd. has successfully developed technologies for extracting products such as carbon fibers and super active carbon materials from high-temperature coal tar. The first production line with an annual capacity of 10,000 tons began construction in April this year in Zhungeer Banner, Ordos City, with plans to start operations in November of this year. Oil, gas, olefins, composite materials… Some enterprise leaders and experts say that modern coal chemical technology is advancing at a rapid pace, with new technological breakthroughs and new projects coming online almost every year. Growing industrial scale: According to investigations by journalists, driven by **-level demonstration projects, the modern coal chemical industry, including coal-to-oil, coal-to-natural gas, and coal-to-olefins, has seen its scale expand over the past few years, developing in a direction characterized by larger scale, more integrated supply chains, and cluster formation. At the end of last year, the Zhongtian Hechuang advanced coal processing demonstration project located in Wushen Banner, Ordos City, went into full operation. With a total investment of over 50 billion yuan, this project is capable of processing 8 million tons of coal per year; it is designed to produce 3.6 million tons of methanol and 1.37 million tons of olefins annually. It is currently the largest integrated coal chemical project in China. Inner Mongolia Yitai Group is one of the first coal enterprises in China to enter the field of coal-to-oil production. Since 2002, Yitai Group, in collaboration with the Chinese Academy of Sciences, Shenhua Group, and Lu’an Group, jointly established Zhongke Synthetic Oil Technology Co., Ltd. to develop complete sets of technologies for the indirect liquefaction of coal as well as high-efficiency catalysts. The industrial demonstration project for the indirect production of oil from coal, with an annual capacity of 160,000 tons, has been in operation successfully for 9 years since its trial production began in 2009. Thanks to technical upgrades in recent years, the annual production capacity of this demonstration project has been increased to 200,000 tons. According to Zhang Donghai, chairman of Yitai Group, the fine chemicals project with an annual production capacity of 1.2 million tons, built using relevant technologies, came online last year; a demonstration project for producing oil indirectly from coal with an annual capacity of 2 million tons is also under construction. With the technical support of Sinopec Synthetic Oil Company, since 2016, coal-to-oil projects with capacities of 4 million tons by Shenhua Ningmei Group and 1.8 million tons by Lu’an Group, among others, have been put into operation one after another, marking a new stage in the development of China’s coal-to-oil industry. Beijing Holding Group’s 4 billion cubic meters per year coal-to-natural gas project, Jutai’s 600,000 tons per year methanol-to-olefins expansion project, and SNOW’s 200,000 tons per year stable light hydrocarbons project… As these projects were one after another launched, constructed, and put into operation, by the end of last year, Ordos City had already achieved a modern coal chemical production capacity of over 10 million tons. The industry is also developing in a clustered manner. Since the construction of the Yitai 1.2 million tons per year fine chemicals plant in Hangjin Banner, 11 upstream and downstream supporting enterprises have successively settled around the project. This plant is capable of producing dozens of chemical products such as high-melting-point synthetic waxes, liquid paraffin, and stabilized light hydrocarbons, thus forming an ecological industrial chain with integrated upstream and downstream operations. With the commissioning of projects for coal-to-oil and coal-to-natural gas production in Inner Mongolia, Ningxia, Shaanxi, Xinjiang and other regions, as well as the advancement of such projects, China’s modern coal chemical industry has begun to take shape. Its products are also expanding to include synthetic materials such as fibers, resins, and rubber, as well as intermediate and end-products. The strategic value becomes evident, said Li Yongwang, general manager of Zhongke Synthetic Oil Technology Co., Ltd. and a researcher at the Shanxi Coal Chemistry Institute of the Chinese Academy of Sciences. China’s resource profile is characterized by abundant coal, a shortage of oil, and limited gas reserves; therefore, developing the modern coal chemical industry is of great strategic importance for advancing strategies aimed at replacing oil and making more efficient use of coal. With the expansion of industrial scale and advancements in technology, modern coal chemical industry has achieved market competitiveness on par with that of the petrochemical industry, and its strategic value in replacing petroleum and enabling cleaner and more efficient use of coal is becoming increasingly evident. Liu Jianqiang, general manager of HuiNeng Company, said that the liquefied natural gas produced by the company has a purity of 99.7% and is considered a clean energy source; it is currently used primarily as fuel for heavy trucks and for heating purposes. The calorific value of 1 kilogram of liquefied natural gas is 13,000 kcal, which is higher than that of diesel at 3,000 kcal. Yet its price per kilogram is only around 3.7 yuan, roughly half that of diesel, giving it a clear advantage. As technology improves, the cost of coal-to-oil production also continues to decline. Zhang Donghai, chairman of Yitai Group, cited the 160,000 tons per year coal indirect liquefaction industrial demonstration project as an example: initially, 1 ton of catalyst could produce over 500 tons of oil, but now it can produce up to 1,500 tons of oil. The total water consumption per ton of product has dropped from 13 tons in the initial design to 6 tons, while the total coal consumption has decreased from 5.54 tons to 5.2 tons. Based on international crude oil prices, this demonstration project can be profitable when the crude oil price is above $50. With the recent further improvement in catalyst efficiency, costs will be reduced further in the next step through the enlargement of key equipment such as gasifiers and technological upgrades. Hu Qingbin, deputy chief engineer at Shenhua Ordos Coal-to-Oil Branch, said that currently, for the first coal-to-oil production line with a capacity of one million tons per year, the coal consumption per ton of oil produced is 3.5 tons, of which about 1 ton is fuel coal. Break-even can be achieved when the price of crude oil is between $55 and $60. Once the second and third production lines are completed, the oil recovery rate will increase by nearly 10%, and the break-even point will drop below $50 per barrel. In particular, the special coal-based oils developed by Shenhua Ordos Coal-to-Oil Branch can be used for both military and civilian purposes. For example, the general-purpose diesel developed for its ground equipment has a low freezing point; it has successfully withstood extreme cold conditions at Zhongshan Station in Antarctica, is suitable for use in all regions, and boasts stable quality, making it appropriate for storage for military use ； Coal-based aviation jet fuel has entered the stage of trial production and application testing. In February this year, coal-based aerospace kerosene was successfully tested for the first time in China’s new heavy-lift rocket engines, and coal-based specialty fuels such as those for military ships are also under development. The development of related coal-based specialty oils is of great significance for ensuring **energy security. In the past, olefin products in China were mainly produced from oil; the breakthrough in coal-based olefin technology is of great significance for alleviating the pressure on China’s oil supply. Entrepreneurs say that as modern coal chemical technology matures and the scale of the industry grows, there is room to further reduce indicators such as coal consumption, water consumption, production costs, and investment per unit of production capacity; at the same time, energy conversion efficiency and product quality will also improve. (Reporters: Li Renhu, Ren Huibin, Jia Lijun) Source: People’s Daily Online – Energy Section; Editing: Guan Guan