Detailed progress of the methanol-to-olefins project and methanol project at Feihong Chemical Co., Ltd., Shanxi Coking Coal Group

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Detailed Progress of the Methanol-to-Olefins Project and Methanol Project at Shanxi Coking Coal Group Feihong Chemical Co., Ltd. Author/Source: Huahua Network – Coal Chemicals Date: 2020-01-05 Clicks: 51 Recently, Shanxi Coking Co., Ltd. provided detailed information on the progress of two projects managed by its subsidiary, Shanxi Coking Coal Group Feihong Chemical Co., Ltd.: a methanol-to-olefins project with an investment of 15.475 billion yuan and an annual production capacity of 600,000 tons, as well as a comprehensive renovation project for converting coke oven gas into methanol with an annual production capacity of 1 million tons. The 600,000 tons per year methanol-to-olefins project of Shanxi Coking Coal Group Feihong Chemical Co., Ltd. (hereinafter referred to as “Shanjiu Feihong”) was initiated in 2011; it received approval from the Shanxi Provincial Development and Reform Commission in December 2012. The project is carried out by Shanjiu Feihong, a subsidiary controlled by Shanxi Coking Coal Co., Ltd. (hereinafter referred to as “the Company”). The Shanjiao Feihong project includes an olefins project and a comprehensive renovation project for producing methanol from coke oven gas at a capacity of 1 million tons per year (referred to as the “coke oven gas to methanol project”). The olefins project was approved in December 2012, with an investment amount of 8.58 billion yuan ； The methanol project was approved in September 2015, with an investment amount of 6.895 billion yuan; the total investment for both projects amounts to 15.475 billion yuan. (1) Project investment progress and completion status: As of the end of November 2019, a total of 2.495 billion yuan had been invested in the project. The approval for initiating this project has been obtained, and all necessary procedures such as environmental impact assessments and energy assessments have been completed. The total area covered by land acquisition and demolition is 3,130 mu, of which 2,204 mu has been acquired and the demolition and site clearing have been completed, while 926 mu has obtained planning approval. All 9 sets of long-cycle equipment for the olefins project arrived by the end of 2016. On-site construction has completed tasks such as the preparation of the site with access to utilities and a level surface over an area of 1,650 mu, the construction of retaining walls and slopes, temporary roads, pre-treatment of the foundation for the main equipment, the establishment of a methanol storage area, a comprehensive warehouse, and parts of the underground pipeline network. (II) Reasons for the slow progress of the project: 1. The olefin project requires 1.8 million tons of methanol as raw material each year. According to the initial feasibility study report for this project, 450,000 tons of this methanol will be supplied by the company itself, while the remaining 1.35 million tons will be purchased from external sources. After 2014, oil prices fell, and as a result olefin prices dropped as well, reducing the profit margins for methanol-to-olefins production ； The methanol production facilities in Shanxi Province are small in scale and scattered in location; furthermore, as the coking market shrinks, their operating rates are low, resulting in insufficient and unstable supply, as well as safety risks associated with transportation. To reduce market risks and risks associated with safe transportation, the company originally planned to build a methanol production facility using coke oven gas, as well as a 1 million tons per year methanol production facility using coal (hereinafter referred to as “coal-based methanol”) in order to ensure a supply of raw materials for its olefin production projects. 2. After deciding to establish a methanol production facility, various procedures such as feasibility studies, evaluations, and applications were carried out. The methanol production project using coke oven gas was registered with the Shanxi Provincial Development and Reform Commission in September 2015; the necessary assessments and environmental impact evaluations were completed, and the preliminary design was finished ； The coal-to-methanol project was approved by the Shanxi Provincial Development and Reform Commission in February 2019. 3. According to the feasibility study report for the olefin project, the cost of methanol as a raw material accounts for approximately 80%-82% of the total cost of olefins; a stable supply of methanol is therefore a key factor affecting the competitiveness of this olefin project. The overall project schedule has been adjusted due to matters such as feasibility studies, approvals, and design for the two methanol raw material projects. 4. To reduce investment costs and maintenance expenses and enhance the core competitiveness of the project, the three projects are planned and designed as an integrated whole, with the overall layout of the projects and their auxiliary facilities being optimized and integrated. 5. Given that the coal-to-methanol project is located in Linfen City, which lies in the Fenwei Plain, it is difficult to meet the targets regarding the reduction of coal consumption and the control of total pollutant emissions. In line with Shanxi Province’s policies for the coking industry, and after taking into full account the findings of third-party feasibility studies and expert opinions, the project plan was adjusted. In September 2019, the coal-to-methanol project was discontinued; instead, efforts continued on the olefin project and the project for producing methanol from coke oven gas. The remaining methanol raw materials were supplied through methanol production enterprises located in the vicinity of Shanjiao Feihong. In summary, in order to ensure a safe and stable supply of methanol as a raw material for the olefin project and to reduce project risks, it is planned to build a methanol production facility as part of this project. The construction plan has been optimized in line with environmental protection requirements, as well as the goals of upgrading the coking industry in Shanxi Province and the relevant policies for that industry. Additionally, due to the complexity of the preliminary research, evaluation, and approval processes, progress on the olefin project has been slow. (III) Environmental protection: During the preliminary design phase of the project, full consideration was given to the requirements of environmental protection policies as well as relevant regulations and standards; an environmental impact assessment was conducted, and approval from ** was obtained. The pollution treatment design is carried out in accordance with the requirements of environmental impact assessment and approval, to ensure compliant emissions once the project is put into operation. Zero wastewater discharge system: The wastewater treatment unit employs a process of “pre-treatment + biological treatment + ultrafiltration + reverse osmosis” ； The reclaimed water reuse system employs the \"ultrafiltration + reverse osmosis + sodium filtration for salt separation combined membrane concentration\" technology ； The evaporation crystallization unit employs technologies such as the “three-effect evaporation zero-discharge system”. Waste gas treatment: For boiler flue gas treatment, the technologies of \"low-nitrogen combustion + SNCR + SCR denitrification + bag filter dust removal + ammonia-based desulfurization + high-efficiency mist removal\" are employed, ensuring that the treated waste gas meets ultra-low emission standards ； Low-temperature methanol washing waste gas, utilizing low-temperature plasma waste gas treatment technology ； Process exhaust gases are collected and sent for treatment in a flare, etc. Solid waste treatment: Boiler ash and slag, gasification residue, etc. are sent to cement plants for comprehensive utilization ； The impurity salts resulting from evaporation crystallization are used to produce sodium chloride and sodium sulfate ； Hazardous wastes such as slag salts, spent catalysts, biochemical sludge, and used mineral oils are sent to qualified manufacturers for treatment. (IV) Next steps: On the basis of completing the integrated planning for the entire project, Shanjiao Feihong will coordinate and arrange the schedule accordingly. 1. The Shanjiao Feihong project is expected to begin construction at the end of 2020, with a timeline of around 29 months from the start of EPC work to commissioning. 2. The company will continue to expand along the industrial chain of downstream olefin projects in accordance with the \"three modernizations and one standardization\" principle.