Lack of advanced and mature core technologies puts the coal-to-gas industry in a difficult situation

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Lack of Advanced and Mature Core Technologies Plagues the Coal-to-Gas Industry Author/Source: China Chemical Industry News Date: 2017-07-04 Clicks: 37 Theoretically, among the five major products of modern coal chemical industry, coal-to-gas holds the most promising prospects. 　　On the one hand, our country has a large population, resulting in a high demand for energy sources, especially clean natural gas. On the other hand, the combined coal reserves of Xinjiang and Inner Mongolia account for 62.3% of the country’s total coal resources. Due to their remote locations and poor transportation facilities, the best way to utilize these abundant coal resources is to convert them into gas, which can then be transported via pipelines to the interior areas of the country. Of the 17 coal-to-gas projects that have been built, approved, or granted permits, 14 are concentrated in the aforementioned regions. (Reference image from the Internet) Logically, a project that boasts huge market demand, significant strategic importance, and widespread attention should develop smoothly and thrive. But the truth is exactly the opposite. 　　Among the four modern coal chemical technology routes that have been put into commercial use, coal-to-gas production performs the worst. Apart from the 2 billion cubic meters per year coal-to-gas project operated by Yili Xintian Coal Chemical Co., Ltd., which was launched recently, the three coal-to-gas projects – Datang Keqi Coal-to-Natural Gas Company, Inner Mongolia HuiNeng Coal Chemical Co., Ltd., and China Qinghua Energy Group – which began operation before 2016 and have been in operation for more than two years, all yielded negative returns for their investors since they were commissioned. 　　Although many industry insiders attribute the current difficulties faced by coal-to-gas production to the monopoly held by domestic oil and gas giants over gas pipelines, their deliberate efforts to keep prices low for coal-to-gas gas entering these pipelines, as well as falling international oil and gas prices and high domestic coal prices, a closer analysis reveals that the real reason for these difficulties is the lack of advanced and mature core technologies, as well as insufficient competence within the industry itself. 　　Looking at the 4 coal-to-gas projects that have been completed, they all share the following common characteristics: First, in order to obtain as much methane as possible from the raw gas, coal gasification units employ pressurized coal gasification technology. Compared with advanced powder coal gasification or coal slurry gasification technologies, pressurized coal gasification using crushed coal has disadvantages such as a limited range of suitable coal types, small scale of individual gasifiers, large amounts of wastewater with complex compositions that are difficult to treat, long process flows, high costs for environmental protection facilities and their operation, and significant environmental risks. With increasingly stringent environmental regulations, this technology will continue to increase the operating costs of the entire facility, thereby reducing the profitability and competitiveness of coal-to-gas plants. 　　Secondly, key equipment such as methanation reactors, methanation catalysts, and recycle gas compressors, along with various additives, are almost all imported from abroad, which increases the project investment costs as well as the expenses associated with operation, maintenance, and repair in the future, thereby reducing the profitability of the facility. 　　Third, in terms of process design, plant layout, plant scale, and technical approach, the model of coal-to-gas production used by the American Great Plains Company is adopted or largely followed. As the American Great Plains Project was the world’s first coal-to-gas project, there was no existing experience to draw on at that time, which caused it to face many difficulties throughout the entire process – from the initial preparation and construction phases to later production and operation – and it even suffered huge losses at one point. Many domestic coal-to-gas projects copy the Great Plains model without any discernment (and with few other examples to choose from), which is like following a poor teacher – how can good results be expected in such a situation? 　　Therefore, it is necessary to develop suitable large and extra-large gasification units as well as advanced and reliable methanation technologies at the earliest possible time, and to achieve domestic production of such technical equipment. 　　It is gratifying that the technologies independently developed by some domestic enterprises are already capable of playing a key role in reducing the investment and energy consumption associated with coal-to-gas projects, as well as enhancing the profitability of such projects. For example, the CCSI technology (integrated coal pyrolysis and gasification) and the large-scale transport-bed continuous gasification technology developed by Shaanxi Yanchang Petroleum Group enable the recycling of coal tar and facilitate the direct gasification of hot coke powder. Moreover, each gasification unit can process up to 5,000 tons of coal per day, with no difficult-to-treat wastewater generated. As a result, these technologies offer significant benefits in terms of energy conservation, emission reduction, and economic efficiency. Estimates show that when using this technology to develop coal-to-gas projects, the cost per cubic meter of natural gas can be kept below 1.1 yuan. For another example, the coal catalytic gasification and coal hydrogenation gasification technologies developed by Beijing SNOW Group not only have a wide range of applicable coals, with the methane content in the crude syngas exceeding 20% (and reaching up to 50% in some cases), but they also do not generate large amounts of gasification wastewater that is difficult to handle. The cost of coal-to-gas plants built using this technology can be kept below 1 yuan per cubic meter. 　　Industry experts point out that by using the aforementioned domestic technologies and equipment, along with careful design, the investment for a coal-to-gas project with an annual capacity of 4 billion cubic meters can be kept under 20 billion yuan, saving approximately 10 billion yuan compared to existing and under-construction projects. Based on the current coal prices, the overall cost of coal-to-gas production can be kept below 1.3 yuan per cubic meter, which is significantly lower than the 1.6 to 1.9 yuan per cubic meter cost of several coal-to-gas projects that are already in operation; thus, it has a competitive edge in the market. (