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A Record of the Construction of the Coal-to-Natural Gas Project by Inner Mongolia HuiNeng Group Author/Source: Yahuazhixun Date: 2017-08-21 Clicks: 77 “Starting in 2012, as the coal market entered a downturn, the entire industry faced huge pressures. Fortunately, during this difficult period, companies have not only avoided laying off employees or cutting salaries for regular staff, but have also maintained normal production and operation activities as well as the progress of project construction. This is mainly due to our firm grasp of the **opportunities to encourage the development of the clean energy industry, our active adjustment of the industry’s development direction, and our efforts to drive corporate transformation. ” The person in charge of Inner Mongolia HuiNeng Coal and Electricity Group Co., Ltd. (referred to as HuiNeng Group) said. At present, HuiNeng Group has grown into a large joint-stock enterprise with 23 subsidiaries and total assets of 31.7 billion yuan. Its main business areas are coal, electricity, and chemicals, while it also operates in sectors such as finance, real estate, road and bridge construction, and logistics. In 2016, HuiNeng Group paid 3 billion yuan in taxes and fees, ranking 24th among the top 50 coal-producing enterprises in the country. Seizing opportunities by being the first to try new things, HuiNeng Group was established in 2001. As a company whose main business is coal, it achieved rapid growth in the initial years after its founding thanks to its reliance on coal as its core business. As the scale of the enterprise continues to grow, the concern of a \"single industrial structure and insufficient potential for development\" has become a key issue that the decision-makers at HuiNeng Group must address. Low energy efficiency and high pollution are prominent problems associated with the traditional use of coal. Further improving the clean and efficient utilization of coal is not only a **strategy**, but also a key to the sustainable development of resource-based cities; it is moreover the inevitable path for coal enterprises to achieve transformation and development. “The approach of \"mining coal and selling it\" is not sustainable in the long term; it is necessary to extend the industrial chain and, through advanced processing of coal, achieve value addition to these resources as well as their clean, low-carbon, efficient, and safe utilization. Based on a thorough analysis of **industrial policies and industry trends, the decision-makers at HuiNeng Group have outlined a clear path for the company’s further development. It was the year 2008 at that time, and the coal industry was still in its \"golden decade.\" Taking on significant investment and technical risks, HuiNeng Group resolutely decided to launch the coal-to-natural gas project. The project with an annual production capacity of 1.6 billion cubic meters of coal-to-natural gas is **one of the first pilot projects for coal-to-gas conversion.** It is the first coal-to-natural gas project approved by the National Development and Reform Commission to be funded by a private enterprise, and it represents one of the key initiatives for the clean and efficient use of coal in Inner Mongolia Autonomous Region and Ordos City... Behind this list of keywords lies HuiNeng Group’s pioneering efforts in driving industrial transformation and upgrading. In December 2009, the HuiNeng coal-to-natural gas project was approved for construction by the **National Development and Reform Commission. In February 2010, the liquefied natural gas project was approved by the Development and Reform Commission of Inner Mongolia Autonomous Region. The project is located in the Inner Mongolia HuiNeng Coal Chemical Industry Park, within Yijinhuoluo Banner of Ordos City. This park is one of the second batch of industrial circular economy demonstration parks approved and designated by the Inner Mongolia Autonomous Region. The HuiNeng coal-to-natural gas project uses coal as raw material and employs multi-component slurry pressurized gasification technology. Through processes such as gasification, shift reaction, purification, sulfur recovery, methane synthesis, and liquefaction, it produces synthetic natural gas and liquefied natural gas (LNG). During the project construction phase, HuiNeng Group aimed to achieve \"world-leading and domestically first-class\" standards, carefully developing units and utility systems for gasification, purification, synthesis, liquefaction, sulfur recovery, and air separation, striving to ensure that every technology, every process step, and every parameter is of high quality, precise, and accurate. In October 2014, after more than 4 years of relentless efforts and an investment of 7 billion yuan, the first phase of HuiNeng’s coal-to-natural gas project (with an annual production capacity of 400 million cubic meters of coal-to-natural gas) successfully completed its trial operation from the first batch of feedstock used. The product quality met or exceeded the design specifications: the methane purity in the coal-to-natural gas was over 97.0%, while the methane purity in the liquefied natural gas was over 99.7%. This facility is one of the domestic coal-to-natural gas demonstration projects that operates safely, stably, continuously, at full capacity, and with high quality, filling the technical gap in China regarding the production of coal-to-natural gas using water-coal slurry gasification technology. This project has also become a key project for the operation of Ordos City as a major hub for the production of **clean energy. With its advantages standing out and a promising future ahead, as one of China’s first coal-to-natural gas demonstration projects, the HuiNeng coal-to-natural gas project’s safe and stable operation has helped to develop a range of replicable and scalable ideas, practices, technologies, and experiences for the development of the coal-to-gas industry. Its exemplary and leading role has been fully demonstrated, mainly reflected in the “seven advantages”. Technological equipment is world-leading. From the outset of its construction, the HuiNeng coal-to-natural gas project aimed to become a world-leading and domestically top-tier coal-to-natural gas project, and it adopted the most advanced technical equipment available in the world at that time. The investment in the introduction of first-phase engineering technologies and equipment imports amounted to over 800 million yuan. Patent technologies, processes, and equipment from France, Denmark, Germany, the United States, Japan, and other countries were selected; through processes of introduction, digestion, absorption, and re-innovation, these were combined optimally with the mature technologies and equipment available from the Northwest Chemical Research Institute, Dalian University of Technology, and Shandong Sanwei Company. As a result, the entire installation features advanced technology, energy efficiency, reduced consumption, and environmental sustainability. Significant improvements have been achieved in energy conservation and consumption reduction. For methane synthesis in this project, patented technologies and catalysts from the Danish company Topsoe are utilized, with a synthesis pressure of 5.32 megapascals and a temperature of 620 degrees Celsius – a first of its kind among currently operating facilities worldwide. The air separation unit utilizes patented technologies and complete sets of equipment from the French company Air Liquide; its compression units are manufactured by the German company Mannesmann. High-temperature and high-pressure reaction systems are employed, and the scale of the air separation unit is increased, thereby achieving energy savings and reduced consumption. The entire system efficiently recycles the high-temperature and high-pressure steam generated as a by-product of methane synthesis for power generation and compressor operation, thereby saving coal fuel and **improving thermal efficiency**. Water conservation is of great significance as a model. This project is the first domestic demonstration project to produce coal-to-natural gas using water-coal slurry gasification technology; it does not generate organic substances such as tar, naphthalene, or phenols during the production process, and most of the wastewater can be recycled. The circulating water system combines open and closed types; all 5 steam turbine units in the plant are cooled by air coolers, resulting in significant water savings. The water supply for this project relies on rainwater collection systems such as surface flow capture; coal mine waste water, ice-melting water in spring, and rainwater in summer are all collected in 4 artificial reservoirs. After being treated at water purification plants, the annual water supply capacity can exceed 10 million tons, thereby enabling the recycling and purification of various water resources including wastewater from local mining areas. SBR biofilm technology is used for wastewater treatment, while two sets of American HERO high-efficiency reverse osmosis patented technology are employed for reclaimed water reuse, achieving a water reuse rate of over 90%. This holds great practical significance for the development of modern coal chemical industries in coal-rich but water-scarce regions in the northwest. Industrial waste emissions meet the standards. From the initial stage of design, environmental protection was given top priority in this project; technical advancements were made in key areas such as methane synthesis, liquefaction, wastewater treatment, and waste heat recovery. The total investment in environmental protection measures for the first phase of the project amounted to over 500 million yuan. The sulfur recovery system utilizes the SSR patented technology from Shandong Sanwei Petrochemical Company, achieving a sulfur recovery rate of 99.9%. The thermal power plant uses circulating fluidized bed boilers, and is equipped with external limestone wet flue gas desulfurization and SNCR denitrification technologies; as a result, the emissions of sulfur dioxide and nitrogen oxides are below the emission standards for air pollutants in thermal power plants. Measures such as recovery and blending with boiler fuel are taken for the waste gases generated during the production process, to enable the utilization of combustible gases and the recycling of process gases. The second phase of the project plans to build a carbon dioxide recovery system simultaneously, which will enable a significant reduction in carbon dioxide emissions. Clean utilization of low-calorific-value coal. This project uses low-calorific-value coal as the raw material. During the production process, the crude syngas generated by gasification is purified to remove acidic gases and impurities, and standard sulfur is produced as a by-product through a sulfur recovery system. This approach effectively addresses the problems associated with low-calorific-value coal, such as high ash content, low thermal efficiency, and significant pollution, thereby enabling the efficient and clean utilization of such coal. Demonstration of clean energy promotion. To date, the 400 million cubic meters of coal-to-natural gas produced in Phase 1 of this project has all been liquefied. Since its commissioning, nearly 700,000 tons of liquefied natural gas have been produced and sold to regions such as Inner Mongolia, Shanxi, Hebei, Beijing, and Shandong. To ensure the sales of products once the second-phase project is completed, HuiNeng Group established North China HuiNeng Natural Gas Co., Ltd. To date, 8 CNG refueling stations have been built and put into operation in Xingtai City, Hebei Province, and 400 yellow-label buses have been replaced in that city. In 2017, HuiNeng Group will build 60 CNG stations in regions such as Beijing-Tianjin-Hebei, Shaanxi-Gansu-Ningxia, and Inner Mongolia. Once these sites come online, they will play a positive role in improving the air quality in the aforementioned areas. The economic benefits of the project are promising in the long term. Based on the trial production results of the first phase, cost production has been effectively controlled through optimization adjustments, and there is still room to reduce various consumption indicators. At the same time, all infrastructure and supporting facilities were completed in Phase 1, which will result in significantly lower construction costs for Phase 2; by then, the scale benefits of the project will become fully apparent. In addition, HuiNeng Group has also established its own website for sales, thereby creating an integrated production-supply-sales industry system that further enhances economic efficiency. While ensuring the stable operation of the first phase, the second phase of the HuiNeng coal-to-natural gas project is planned to add an output capacity of 1.6 billion cubic meters per year, along with the construction of a natural gas liquefaction production line. The infrastructure for the project, such as the central control room, central laboratory, fire station, thermal power plant, main substation, water source facilities, water purification station, desalination station, circulating water system, sewage treatment plant, the entire underground pipeline network of the plant, as well as office buildings and staff dormitories, are generally sufficient to meet the needs of the second phase of the project. At present, evaluations of various economic and technical options are underway, and construction is expected to begin soon. The project is expected to require an investment of 20 billion yuan, resulting in a total production capacity of 2 billion cubic meters per year of coal-to-natural gas. It is anticipated that annual sales revenue will exceed 4 billion yuan, taxes and fees paid will be over 500 million yuan, and more than 3,000 job opportunities will be created for the society.