What is the economic viability of coal-based aromatics? What are the future prospects for this industry?

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What is the economic viability of coal-based aromatics? What are the future prospects for this industry? Author/Source: Huang Ge Province (Research Institute of Petrochemicals, China National Petroleum Corporation, Beijing 102206). Date: 2018-01-17. Views: 15. Abstract: This paper introduces the current status of research and development as well as application of coal-based aromatic hydrocarbon technology in China, analyzes the economic viability of this technology, and discusses the prospects for the development of China’s coal-based aromatic hydrocarbon industry. It is argued that coal-based aromatic hydrocarbons serve as an important supplement to petroleum-derived aromatics and represent a vital means of meeting the growing demands of China’s polyester industry. At present, the production of aromatics from coal in our country is still in its initial stages of industrialization, and the market prospects are promising; therefore, development should be accelerated. However, there are also some practical issues that require widespread attention within the industry. One such issue is the launch of numerous new projects for oil-based aromatics domestically, which puts significant pressure on the future capacity for producing aromatics from coal ； Secondly, under low oil prices, coal-based aromatics have weaker competitiveness; it is necessary to continuously reduce production costs through technological advancements ； Third, conduct a thorough environmental impact assessment for new coal-based aromatic hydrocarbon projects to ensure the clean, efficient, and safe operation of the facilities. Keywords: coal-derived aromatics ； p-xylene ； Methanol to aromatics ； Economics ； Future Prospects: In recent years, China’s textile industry has experienced rapid growth, which has driven the swift expansion of the polyester sector as well as that of purified terephthalic acid (PTA) in the intermediate stage. The market demand for aromatic compounds used as raw materials for polyester, especially p-xylene (PX), has continued to rise steadily. In 2010, China’s demand for PX was 9.44 million tons; by 2016, this figure had risen to 22.07 million tons, with an annual growth rate of over 15%. In our country, PX is primarily produced by refinery reforming units and naphtha cracking units in petrochemical enterprises. In 2016, the production capacity was 13.97 million tons per year, while the actual output was 9.77 million tons. Due to severe shortages in production capacity, the import volume of PX in 2016 reached 12.36 million tons, resulting in an import dependence rate of 56%. To meet the growing demand in the aromatic hydrocarbons market and expand production capacity for these compounds, on the one hand, oil and petrochemical companies are adding more aromatic hydrocarbon production facilities to their new projects; on the other hand, coal chemical companies are accelerating the development of coal-based aromatic hydrocarbons. At present, coal-based aromatic hydrocarbons have become an important and emerging field within China’s modern coal chemical industry. 1. Current status of research, development, and application of coal-based aromatic hydrocarbon technology in China. Coal-based aromatic hydrocarbons are produced by using coal as a raw material to first generate methanol; thereafter, methanol is used as a starting material, and through dehydration and cyclization reactions catalyzed by bifunctional active catalysts, aromatic hydrocarbons are synthesized. In the coal-to-aromatics process, both coal-to-methanol production and the separation and conversion of aromatics are mature technologies; therefore, the key aspect of coal-to-aromatics technology lies in the conversion of methanol into aromatics. The reaction mechanism involves three main steps: dehydration of methanol to produce dimethyl ether, dehydration of methanol or dimethyl ether to produce olefins, and the transformation of these olefins into aromatics and alkanes through processes such as polymerization, alkylation, cracking, isomerization, cyclization, and hydrogen transfer. At present, the coal-to-aromatics technologies in China mainly include the fixed-bed methanol-to-aromatics technology (MTA) developed by the Shanxi Institute of Coal Chemistry under the Chinese Academy of Sciences, the circulating fluidized bed methanol-to-aromatics technology (FMTA) from Tsinghua University, as well as the coal-based methanol-to-aromatics technology developed by the Research Institute of Henan Coal Chemical Group and Beijing University of Chemical Technology. 1.1 Fixed-bed methanol to aromatics technology (MTA): In 2006, the Shanxi Institute of Coal Chemistry, Chinese Academy of Sciences, completed catalyst screening and evaluation as well as repeated regeneration experiments using the MTA technology; the single-pass lifetime of the catalyst was over 20 days, and its total lifetime was greater than 8,000 hours. In 2007, the Shanxi Coal Chemistry Research Institute collaborated with Saiding Engineering Co., Ltd. to carry out an industrial-scale experimental study on MTA technology. A fixed-bed reactor was used, with methanol as the raw material and the modified ZSM-5 molecular sieve MoHZSM-5 (ion-exchanged) as the catalyst. Under conditions of a temperature range of 380–420°C, atmospheric pressure, and a space velocity of 1 h-1, catalytic conversion was carried out to produce products primarily consisting of mixed aromatics BTX (benzene, toluene, xylene). Subsequent cooling and separation were employed to divide the gaseous products containing low-carbon hydrocarbons from the liquid products containing C5+ hydrocarbons; the C5+ hydrocarbons in the liquid phase were then separated through extraction to yield aromatics and non-aromatics. This technology achieves a methanol conversion rate of over 99%, a selectivity for the liquid-phase products of over 33%, a selectivity for the gas-phase products of less than 10%, and an aromatic content in the liquid-phase products of over 60%. In January 2016, utilizing the fixed-bed methanol-to-aromatics technology developed by Shanxi Coal Chemical Research Institute and Saiding Engineering Company, Shaanxi Baonit Chemical Group put a 100,000 t/a methanol-to-aromatics production facility into operation, and the plant has been operating steadily since then. The product structure of this project includes 100,000 tons per year of light aromatics, 11,000 tons per year of heavy aromatics (tetramethylbenzene), and 14,000 tons per year of liquefied petroleum gas (LPG). The products are lead-free, sulfur-free, have low benzene content, high octane ratings, and excellent quality. The production process is energy-efficient and environmentally friendly, with wastewater being recycled. 1.2 Circulating Fluidized Bed Methanol to Aromatics Technology (FMTA) The reaction of converting methanol into aromatics is a highly exothermic process, and the catalyst loses its activity rapidly due to carbon deposition. To ensure the timely removal of reaction heat and the regeneration of the catalyst through carbonization, a fluidized bed reactor can be utilized to carry out the conversion of methanol into aromatics under the action of the catalyst. In 2010, Tsinghua University was the first in the world to develop the Fluidized Bed Methanol-to-Aromatics (FMTA) process technology, which includes a two-stage continuous fluidized bed reaction-regeneration process, medium-low temperature cooling and pressure swing adsorption-light hydrocarbon reprocessing, as well as non-crystalline separation of liquid-phase aromatics-benzene/toluene reprocessing. From 2011 to 2013, Tsinghua University collaborated with Beijing Huadian Coal Industry Group to build and operate an industrial-scale pilot plant for the production of aromatics from methanol using a fluidized bed process, with a capacity of 30,000 tons per year. The plant consisted of one fluidized bed reactor for the conversion of methanol into aromatics and one reactor for the aromatization of light hydrocarbons; modified ZSM-5 was used as the catalyst, and the aromatization reaction was carried out under conditions of a pressure of 0.1 MPa and a reaction temperature of 450°C. The test unit operated continuously for 443 hours, and the results showed that the methanol conversion rate was close to 100%, the yield of aromatic compounds was 74.47%, and the methanol consumption per ton of aromatic compounds was 3.07 tons. Between 2013 and 2014, Tsinghua University and the East China Design Institute of PetroChina jointly developed a 600,000 t/a fluidized-bed methanol-to-aromatics process package, laying the foundation for the further industrialization and commercialization of this technology. In April 2014, HuanDian Coal Industry Group proposed a plan for the world’s first industrial demonstration project for producing aromatics from coal via methanol, with a total estimated investment of 33 billion yuan. This project would involve 3.6 million tons per year of coal-to-methanol production, 1.2 million tons per year of methanol-to-aromatics production using fluidized bed technology, 1.1 million tons per year of aromatic compounds production, 1.7 million tons per year of PTA production, and 600,000 tons per year of polyester-related products as part of an integrated upstream and downstream production system. In 2016, the first phase of the project, which involved an investment of 13.36 billion yuan, began construction in the Yuheng Coal Chemical Industry Park in Yulin City, Shaanxi Province. It includes facilities for producing 1.2 million tons per year of methanol from coal (with an additional 600,000 tons of methanol purchased annually), 600,000 tons per year of mixed aromatics from methanol, 555,000 tons per year of PX, and 800,000 tons per year of PTA; completion and operation of these facilities are expected by 2018. http://img.yf116.cn/image/img/20180117/836293098978.jpg Once the FMTA process is put into industrial use, it is expected to enable an integrated industrial chain that covers the clean utilization of coal, as well as the production of intermediate products such as methanol, PX, and PTA, along with polyester synthesis. Hydrogen and steam generated during the production process can be recycled, resulting in an energy conversion efficiency of 43.86%. Approximately 8 tons of water are required to produce 1 ton of PX. This technology offers significant advantages in terms of integration; moreover, the dry gas produced as a by-product can be recovered to increase methanol production, while the wastewater from the process can be used as makeup water for recycling, ensuring rational utilization of both resources and energy. 1.3 Current Status of Research on Other New Technologies for Aromatic Hydrocarbon Production 1.3.1 Technology for Producing Aromatic Hydrocarbons via Toluene Methanol Methylation The Shanghai Research Institute of Petrochemical Technology, Sinopec, initiated research on the toluene methanol methylation (MTX) technology in 2009. This technology makes use of HZSM-5 molecular sieves modified with La2O3, MgO, or La2O3-MgO composites, and employs steam treatment to deactivate the catalyst, thereby effectively improving the selectivity of PX in the products. Ultimately, the PX selectivity exceeds 94%, and the toluene conversion rate is close to 20%; theoretically, only 1 ton of toluene is required to produce 1 ton of PX. In December 2012, the first industrial plant for toluene methanol methylation with an output of 200,000 tons per year, developed jointly by this institute, Yangzi Petrochemical, and Luoyang Engineering Company, underwent industrial trials at Yangzi Petrochemical. The project processes 200,000 tons of toluene per year and produces 240,000 tons of C8+ aromatics annually; the methanol conversion rate is 100%, and the xylene selectivity is greater than 80%. In June 2014, the project passed the technical appraisal organized by the Science and Technology Department of Sinopec, resulting in the development of a complete set of MTX technologies with independent intellectual property rights. 1.3.2 Technology for Producing PX and Low-Carbon Olefins from Methanol and Toluene: The Dalian Institute of Chemical Physics, Chinese Academy of Sciences, and the Shaanxi Coal Chemical Technology and Engineering Center jointly developed the TMTA technology for producing PX and low-carbon olefins from methanol and toluene. They created high-performance catalysts specifically designed for fluidized-bed processes for producing PX and olefins from toluene and methanol, and achieved industrial-scale production of these catalysts. A pilot-scale study of 100 tons was completed in Hua County, Shaanxi in July 2012. This technology enables flexible adjustment of the PX to low-carbon olefin ratio, with a toluene conversion rate of 24.4%, a methanol conversion rate of 83.0%, and a PX selectivity in xylene of 93.2%. In November 2013, the Shaanxi Coal Chemical Technology and Engineering Center, CNOOC Huizhou Refining & Chemical Co., Ltd., and Sinopec Luoyang Engineering Company signed a cooperation agreement for the development of a technical solution for an industrial demonstration project involving 200,000 tons per year of TMTA production; this project is currently being advanced at full speed. 1.3.3 Technology for the alkylation of benzene and methanol to produce aromatics. The 1 million tons per year aromatics complex at China National Petroleum Corporation’s Urumqi Petrochemical Company generates 300,000 tons of benzene as a by-product each year. To increase the added value of this benzene product, the company’s research institute began working on the development of benzyl methanol alkylation technology in 2008. The mixed aromatics produced by alkyling benzene with the inexpensive chemical raw material methanol are used as components in the formulation of high-octane gasoline; this approach not only allows for full utilization of benzene but also improves the octane rating of the gasoline. In May 2014, the research on Urumqi Petrochemical’s benzyl alcohol alkylation project entered the stage of industrial scale-up testing. Currently, researchers have completed the ton-scale scaling up of the catalyst for the alkylation of benzene with methanol, and have conducted long-term life evaluation tests on the catalyst. 1.4 Technology for direct production of aromatics from coal-based syngas: The one-step synthesis of aromatics from syngas involves the direct catalytic conversion of syngas into aromatics using appropriate catalysts. Compared with the method of producing aromatics from coal via methanol, this approach holds greater potential in reducing capital investment and operating costs. There are two types of catalysts for the direct production of aromatics from coal-based syngas: the first type is composed of an F-T synthesis catalyst component combined with an aromatization catalyst ； The second type is composed of a synthetic methanol/dehydration catalyst combined with an aromatization catalyst. The main institutions in China conducting research on the technology for directly producing aromatics from syngas include Nanjing University and the Shanxi Institute of Coal Chemistry under the Chinese Academy of Sciences. Nanjing University conducted a 60-hour stability test using a Fe-Mo-ZnZSM-5 catalyst; the CO conversion rate ranged from 85% to 99.7%, the aromatic selectivity was between 44% and 58%, the aromatic yield was 34.6% to 57.8%, and the BTX yield was also 34.6% to 57.8%. The Shanxi Coal Chemistry Institute employs a two-stage composite-bed direct aromatization technology for syngas. The upper bed uses a composite catalyst consisting of a synthetic methanol catalyst and a dehydration catalyst, while the lower bed utilizes a composite catalyst made of SAPO and NKF-5 molecular sieves loaded with dehydrogenation components such as Zn and Ga. The CO conversion rate ranges from 75% to 85%, the total aromatic selectivity is between 84.1% and 91.8%, the total aromatic yield is 60% to 72%, and the BTX yield is 42% to 50%. Overall, the one-step process using coal-based syngas to produce aromatics is still in the laboratory research phase, and the progress in this area is worth paying attention to. 2 Economic analysis of coal-to-aromatics technology: In China, the coal-to-aromatics technology is still in the initial stage of industrial development. In the future, key issues that need to be addressed include the design and scale-up of reactors for converting methanol into aromatics, heat balance in reactions, and engineering optimization; furthermore, the process technology needs to be improved. Coal-to-aromatics projects require high capital intensity; the total investment for a project with an annual production capacity of 1 million tons of aromatics is around 28 billion yuan, of which about 25.3 billion yuan is allocated to construction costs. The main factors affecting the production cost of coal-based aromatics are coal prices and oil prices. According to the analysis results of the cost model for coal-to-aromatics production developed by the Petroleum and Chemical Industry Planning Institute, when international oil prices are at 60 dollars per barrel or higher, the coal-to-aromatics route has a cost advantage ； When the oil price reaches $80 per barrel, the production cost of PX via the coal-to-aromatics route is 4,906 yuan per ton; the coal price of 115 yuan per ton is sufficient to ensure profitability for the project. When the crude oil price reaches $85 per barrel (which corresponds to a tolerable coal price of 213 yuan per ton), the production cost of PX is 5,313 yuan per ton; only under these conditions can coal-based aromatic compounds projects meet the requirement of an IRR (pre-tax) of 11%. Coal-based aromatic compounds thus offer better profitability compared to those produced from naphtha. It is worth noting that if externally purchased methanol is used to produce aromatics, the production cost of PX depends entirely on the cost of purchasing methanol as a raw material; therefore, its economic efficiency is lower compared to the route using coal as a raw material. 3 Analysis and Reflections on the Development Prospects of China’s Coal-to-Aromatic Hydrocarbons Industry. Coal-to-aromatic hydrocarbons represent another important modern coal chemical technology that has been developed in China, following coal-to-oil, coal-to-olefins, coal-to-natural gas, and coal-to-ethylene glycol. Developing coal-based aromatics is in line with the characteristics of China’s fossil resource endowment. Coal-based aromatics serve as an important supplement to petroleum-derived aromatics, and they represent a key approach to reducing China’s imports of PX and meeting the growing demands of the domestic polyester industry. At present, the production of coal-based aromatics in China is still in its initial stages of industrialization. Overall, it holds good market prospects and should be developed more rapidly. However, there are also some practical issues that require serious attention and in-depth consideration within the industry, mainly including the following three aspects: (1) The continuous commissioning of new petroleum-based aromatic projects puts significant pressure on the capacity for coal-based aromatic production. In 2010, China’s PX production capacity was 8.26 million tons per year, with a production volume of 6.12 million tons; by 2016, this capacity had increased to 13.97 million tons per year, while the production volume rose to 9.77 million tons. Due to the rapid expansion of polyester production at the downstream end and PTA production at the intermediate stage, demand for PX in China increased sharply – from 9.44 million tons in 2010 to 22.07 million tons in 2016. The supply of PX could not keep up with this growing demand, resulting in a large supply gap that continued to widen over the years. In 2016, China’s imports of PX reached 12.36 million tons, at an average import price of $782 per ton, giving a high degree of import dependence of 56%. In 2011, China’s apparent consumption of PX was around 11 million tons, and by 2016 it rose to 22 million tons – a doubling of consumption over those 5 years. During the same period, China’s PX production increased from 6.8 million tons to 10 million tons, an increase of no more than 50%; the huge gap was covered entirely by increasing imports. Faced with the huge demand for PX products in the domestic market, private petrochemical companies in China have been establishing new aromatic compounds production projects in recent years. For example, Zhejiang Petrochemical’s 9.2 million tons per year aromatic compounds production project in Zhoushan (constructed in two phases, with 4.6 million tons per year of aromatic compounds produced in each phase) ； Hebei Xinhua United Petrochemical’s 5.57 million t/a aromatics project in Caofeidian, Tangshan (of which the PX production capacity is 4 million t/a) ； Three enterprises – Qianhai Group Yihong Petrochemical, Huatong Jingang, and GCL Group (all located in Caofeidian, Hebei) – together have an aromatic compounds production capacity of approximately 7.5 million tons per year ； Shenghong Petrochemical’s 2.8 million tons per year aromatic compounds production project in Lianyungang, Jiangsu ； The 4.5 million t/a aromatic hydrocarbons project of Hengli Petrochemical, which began construction in 2016, is located on Changxing Island in Dalian, Liaoning. The total additional production capacity of these four major petrochemical bases will amount to 22.8 million tons per year, with this new capacity being brought online gradually between 2018 and 2022. In addition, there are new and ongoing PX projects in various places such as Huizhou in Guangdong, Ningbo in Zhejiang, Tianjin, Shanghai, Fujian, Hainan, Guangxi, Yunnan, and Henan, with some of them nearing completion. In 2017, Shandong Province also announced plans for PX projects with a production capacity of nearly 10 million tons. It is estimated that by around 2022, China’s new PX production capacity will exceed 40 million tons per year. By 2020, when combined with the PX products imported from countries such as South Korea, Singapore, Saudi Arabia, Oman, Thailand, as well as those from Taiwan, China, the domestic PX market will soon face an oversupply situation; therefore, decisions regarding investment in PX projects in China need to be made carefully. (2) Under low oil prices, coal-based aromatics have weaker competitiveness; it is therefore essential to focus on technological advancements to reduce production costs. Coal-derived aromatics enjoy cost advantages when international crude oil prices exceed $60 per barrel, and they exhibit good profitability when prices are above $85 per barrel. It can be said that the economic viability of coal-based aromatics technology depends to a large extent on high oil prices. However, according to predictions by renowned international consulting firms such as IHS, with the rapid development of alternative energy sources and the decline in the extraction costs of unconventional oil and gas resources, the global crude oil market supply will remain ample in the future. Even if international oil prices rise in the medium to long term, they will not exceed $80 per barrel, let alone return to the high levels of $100 per barrel seen in the past. Therefore, given the expectation that international oil prices will remain at low to moderate levels in the future, it is imperative to strengthen research and development in coal-based aromatic hydrocarbon technologies in order to reduce production costs. This includes accelerating the development of highly efficient catalysts for methanol aromatization, selective toluene disproportionation, and benzyl alcohol alkylation; improving the performance of these catalysts to increase the yield of PX as the target product; and thereby enabling the conversion of low-value raw materials such as benzene, methanol, and toluene into high-value PX products ； At the same time, by adopting advanced fluidized-bed gasification technology and sophisticated methanol production processes, as well as through rational optimization of energy utilization throughout the production process and the recycling of by-products such as hydrogen, dry gas, and coke, the energy efficiency of the production process is further improved. This helps to reduce material consumption, energy use, and the production costs of PX, thereby enhancing the economic viability of coal-to-aromatics technology. Furthermore, accelerating the development of technologies for the direct production of aromatics from syngas in a single step can shorten the process flow for coal-to-aromatics production, thereby creating conditions to reduce capital investment and enhance the competitiveness of coal-to-aromatics processes. (3) Conduct thorough environmental impact assessments for new coal-based aromatic hydrocarbon projects to ensure the clean, efficient, and safe operation of such facilities. In recent years, China’s polyester industry has developed at a rapid pace, creating an urgent need to accelerate the construction of PX production facilities and expand their capacity. However, due to misunderstandings among some members of the public and the media regarding the properties of PX products and the environmental impact of these facilities, mass protests have occurred in cities such as Dalian, Ningbo, Chengdu, Xiamen, and Maoming. As a result, new PX projects have been put on hold or even canceled, causing significant disruptions to their implementation. Yet, after repeated scientific evaluations conducted by relevant organizations, it was concluded that as long as safety and environmental protection issues are properly addressed and construction and operational management is strengthened, PX projects can indeed be carried out according to the planned specifications. In the past two years, prejudice among most residents toward PX plants has significantly decreased. Coupled with a large gap in the PX market, this is an excellent opportunity to develop coal-based aromatics. During the implementation of new projects, it is necessary to conduct a thorough environmental impact assessment in accordance with the relevant regulatory requirements of our country. At the same time, through the joint efforts of enterprises, the media, **, and society as a whole, it is important to address the concerns of the general public regarding the construction of PX projects. This will help to accelerate the development of industrial demonstration projects. During the construction and operation of these projects, issues should be identified promptly, processes should be continuously optimized, and the technology used should be made more advanced and reliable, so as to ensure that the newly built facilities operate in a clean, efficient, and safe manner.