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Shandong Energy Group’s Future Energy: Pioneering new paths in large-scale coal liquefaction Author/Source: Sinochem New Network Date: 2021-08-25 Clicks: 18 As the pioneer and builder of China’s first million-ton-scale coal indirect liquefaction demonstration project, Shandong Energy Group’s Shaanxi Future Energy Chemical Co., Ltd. has been based in Yulin, Shaanxi, for 10 years. From the construction phase during the 12th Five-Year Plan period to operational phases during the 13th Five-Year Plan period, and now to the mature operation of the demonstration facility, its annual production volume has continued to increase. The company has also made continuous efforts in areas such as technological upgrades, product development, and management innovation. It was the first to optimize and integrate high-temperature and low-temperature Fischer-Tropsch synthesis technologies on an industrial scale, thereby improving the structure of coal indirect liquefaction products and paving a new path for the development of modern coal chemical industries in China and around the world. Striving to reach new heights in technological innovation: In 2012, Shaanxi Future Energy Chemical Co., Ltd., building on the core technologies for indirect coal liquefaction with independent intellectual property rights developed by the former Yankuang Group, launched the construction of China’s first 1 million tons per year indirect coal liquefaction project in Yulin, Shaanxi. On August 23, 2015, this **12th Five-Year Plan coal deep processing demonstration project achieved successful operation from the first attempt at feeding raw materials into it, producing high-quality products such as diesel, naphtha, and liquefied petroleum gas. It filled the gap in China’s industrial development of large-scale coal indirect liquefaction technology, marking a milestone in the commercialization of technologies for the clean and efficient use of coal. It holds great strategic importance for ensuring energy security and promoting diversified energy supply. As a shining \"star\" in the modern coal chemical industry, the million-ton coal indirect liquefaction project has also encountered various bottlenecks resulting from the application of new technologies on its journey from laboratory research to industrial implementation. “To address the issues existing in the demonstration unit and effectively eliminate design flaws, since the project came online, we have devoted considerable effort to continuously optimizing and adjusting the system while ensuring stable production operations. We have successively completed projects such as the renovation of the synthesis loop, improvements to the paraffin filtration process, comprehensive utilization of ammonia from the shift condensate system, optimization of the sulfur recovery system, and research and application of key technologies for meeting emission standards. ”Liu Yongbing, the chief engineer of the Future Energy Coal-to-Oil Branch, said that after fully understanding the operating characteristics of the demonstration unit, the company’s engineering and technical staff embraced a scientific attitude characterized by seeking truth from facts, being pragmatic, and being innovative. Relying on their own efforts, they carried out continuous exploration and research, implementing more than 70 technical upgrades. In particular, the optimization and upgrading of the synthesis system enabled effective reduction of the system’s thermal load, resulting in 110 tons of steam saved per hour, which generated an annual economic benefit of 50 million yuan. By implementing transformation and integration projects to enhance the system’s flexibility in production adjustments, it is possible to save around 90 million yuan in production costs each year ； A new project for the concentration of transformed condensate ammonia water has been established to ensure ammonia balance in the system and enable self-production and use of ammonia products, thereby saving 7.2 million yuan in production costs throughout the year. By addressing the weaknesses in the system’s operation and overcoming unprecedented technical challenges, it is now possible to achieve stable and high levels of production. Moreover, significant savings in energy consumption have been achieved: the total coal consumption per ton of product is around 4.5 tons, while water consumption is less than 5 tons per year on average. The energy conversion efficiency ranges from 43% to 47%, and the reuse rate of water is 98%, meeting the requirements for energy efficiency. In the first half of this year, the total cost of the company’s products decreased by over 700 yuan compared to the previous period. The system’s operational load, as well as daily and monthly production figures, continued to set new records, and the economic efficiency of the facilities reached a new level. Lean management boosts quality and efficiency. In the central control room of the Future Energy Coal-to-Oil Branch, a prominent electronic screen displays the daily output of coal-to-oil products as well as key consumption figures; those that fall short of the set targets are marked in red, serving as a constant reminder to the team members. This is an important step in extending the company’s lean management to the work teams. “We have established the \"Management Measures for Production Volume and Key Consumption Dashboards,\" which display on screens information such as daily product output, unit consumption of raw coal as well as water and electricity, and total costs. By analyzing the reasons for any deviations, we formulate corrective measures to foster an environment in which all employees pay attention to production volume and contribute to cost reduction, thereby boosting daily production to increase monthly output and ensuring stable production to achieve higher levels of output. ”Ma Hongguang, Party Secretary and General Manager of the Coal-to-Oil Business Unit of Future Energy, explained that while maintaining strict control over indicators and striving to reduce costs and increase efficiency, the company focuses on internal improvements by implementing lean management in areas such as production organization, safety management, and mechanical and electrical equipment management, in order to cut costs, improve quality, and enhance efficiency. Since last year, coal prices have remained high, leading to increasing cost risks for chemical companies. To this end, the company has adopted a lean management approach, using precision and market-oriented strategies to carry out activities such as seeking innovative ideas for energy savings and cost reduction, thereby encouraging all employees to work towards cost cuts and increased efficiency; as a result, 40.97 million yuan in savings were achieved in the first half of the year. Among them, the boiler uses fuel gas and gasified fine slag in its combustion process to minimize coal consumption costs ； The coal-fired boiler incorporates 200 tons of gasified fine slag per day, which helps to utilize all the combustible components in the ash and slag; this results in cost savings of over 3 million yuan throughout the year ； The newly built No. 2 sulfur recovery unit has been put into operation, offering the advantages of being able to use high-sulfur coal and producing 50,000 tons of sulfur per year as a by-product. Zhang Jianzhong, deputy general manager of the Coal-to-Oil Branch, said, “We implement the ‘Three Zeros Initiative’ (zero defects, zero accidents, zero failures in equipment) to completely eliminate potential defects in the equipment, thereby ensuring the stable operation of the system.” The boiler system achieved the goal of continuous operation with a single boiler for 5 months, while the 5 gasification units operated simultaneously for a total of 3,955 hours. The first and second stage synthesis reactors operated smoothly and efficiently, and the system demonstrated excellent performance in terms of safety, stability, and long-term operation. As of the end of July, the coal-to-oil production unit had achieved 2,280 days of safe operations in total. ” Liu Yongbing explained that the company adheres to a mindset focused on maintaining critical boundaries, integrates lean principles into all aspects of safety and environmental management, places strong emphasis on training and education to improve the safety awareness of all employees, aims to cultivate \"intrinsically safe\" workers, and further strengthens safety control measures, thereby raising the overall level of safety management. They vigorously carried out the special campaign of \"Performing work to standards and being reliable individuals,\" organizing the safety, mechanical and electrical, process, and infrastructure departments to formulate implementation plans respectively, compiling \"Standardized Maintenance Procedures,\" revising the regulations for special operations, and promoting the standardization, regularization, and refinement of safety maintenance management. On the basis of achieving near-zero wastewater discharge, improve the operational procedures and maintenance of environmental protection equipment such as boilers and sulfur recovery systems, in order to carry out upgrades that result in ultra-low emissions from boilers. In the first half of the year, the emissions of sulfur dioxide, nitrogen oxides, and particulate matter were 4%, 58%, and 22% of the planned levels respectively, with all figures meeting or exceeding both national and local environmental protection requirements. Informatization and intelligence have become new trends in corporate development. The coal-to-oil division is accelerating the development of smart factories. Last year, an emergency management and work safety early warning system was established, with 14 subsystems put into operation, including integrated emergency management, geographic information systems, electronic inspection functions, personnel presence monitoring, work safety early warnings, dual-prevention control systems, electronic work orders, fire management, and environmental protection management. This enables remote monitoring of the operating status of equipment on site, potential risks, employees’ inspection activities and location tracking, as well as the processing of maintenance orders and fire rescue routes, all of which can be viewed at a glance. In January this year, the online condition monitoring and diagnosis system for key large-scale units was put into operation again, enabling online monitoring of 13 such units. Kinetic energy conversion drives development. High-temperature Fischer-Tropsch synthesis is regarded in the industry as a representative of advanced and cutting-edge coal chemical technologies; previously, China had no core technologies or large-scale industrial applications in this field. The low-temperature Fischer-Tropsch synthesis technology used in future coal-to-oil energy production facilities features low reaction temperatures, long carbon chains in the products, and high melting points. Using the wax oil from the bottom of the distillation column of the stable hydrogenation unit in its coal-to-oil branch as raw material, the company established and put into operation a FTO wax refining plant with an annual capacity of 100,000 tons. This plant produces refined FTO wax with a high melting point of 115°C, a product that cannot be manufactured by other similar enterprises in China; this achievement has broken the foreign monopoly and paved the way for development in the field of green chemistry. In October 2020, the newly built 100,000 tons per year refined fischer-tropsch wax production facility of Future Energy successfully produced qualified products from its first batch of feedstock, including a range of fischer-tropsch wax products with different melting points and grades at 52°C, 60°C, 70°C, 108°C, 115°C, and other temperatures. Leveraging the public resources such as land, raw materials, and utility services available from coal-to-oil projects, this initiative improves the efficiency of energy conversion without increasing energy consumption, generating no wastewater, or emitting any exhaust gases. It increases the added value of coal-to-oil products, facilitates the transition from old to new forms of energy, and simultaneously brings substantial benefits to the enterprise. On March 20, the 115°C refined Fischer-Tropsch wax for future energy production was launched on the market and sent to the East and South China regions. This is a new type of high-end FTO wax with the highest melting point in our country; it is primarily used in high-end applications such as gloss waxes, textile auxiliaries, hot melt adhesives, inks and coatings, plastic processing, as well as in the food and cosmetics industries. Previously, such products had to be imported from abroad. While meeting domestic market demands, it will expand overseas to enter foreign markets in the near future. Currently, the system is operating stably over a long period. The product qualification rate is 100%, and the proportion of high-quality products exceeds 95%. With significant advantages in both sales price and product quality, it has become a new profit growth driver. Building on the technology of low-temperature Fischer-Tropsch synthesis, Future Energy employs key technologies for high-temperature Fischer-Tropsch synthesis to construct China’s first industrial demonstration plant with an annual capacity of 100,000 tons; this plant was successfully commissioned with its first batch of feedstock in September 2018. Thus, Future Energy has become the only coal chemical enterprise in China to master both high-temperature and low-temperature Fischer-Tropsch synthesis technologies and achieve integrated production. In April 2019, the \"Industrial Demonstration of Key Technologies and Complete Sets of Technologies for High-Temperature Fischer-Tropsch Synthesis\" and the \"Research and Industrial Application of Catalysts for High-Temperature Fischer-Tropsch Synthesis\" passed the evaluation of scientific and technological achievements, with experts unanimously agreeing that they had reached an internationally leading level. Unlike low-temperature Fischer-Tropsch synthesis, which focuses on producing oil products, high-temperature Fischer-Tropsch synthesis yields a product with a narrower carbon number distribution and a higher olefin content, resembling the innovative one-step olefin production technologies. In particular, it has a high content of alpha-olefins, and it also enables the production of fine chemicals and specialty chemicals that are difficult to obtain through conventional petrochemical routes. Currently, Future Energy is accelerating all preliminary preparations for the 500,000-ton/year high-temperature Fischer-Tropsch industrial demonstration plant. It will utilize surplus resources such as gasifiers and utility systems from its Coal-to-Liquids subsidiary to achieve a combined production process involving both high- and low-temperature Fischer-Tropsch synthesis, allowing for flexible adjustments based on the complementary advantages of the resulting oil products and chemicals. In recent years, the company’s various organizational levels have made full use of their initiative by carrying out evaluations to identify the best workshops in terms of lean management, and by adopting a fully market-oriented business model. Party member technical experts take the lead in conducting research and problem-solving efforts, thereby motivating teams, individual positions, and employees to actively contribute to cost reduction. The project team made every effort to optimize production technologies and implement technical upgrades, successfully overcoming the operational bottlenecks of the core equipment. The production workshop maintains its equipment carefully, recycles old parts, taps into hidden potential, and consistently sets new records for output. Currently, the proportion of high-quality party branches has reached 85%. During the prevention and control of the COVID-19 pandemic, the company launched the \"Spring Breeze Initiative,\" arranging special vehicles to travel back and forth between Zoucheng in Shandong and Yulin in Shaanxi to transport employees back to work or home, thereby reducing the risk of infection. Many Party members volunteered to form volunteer teams for epidemic prevention and control, actively participating in these efforts to provide genuine assistance to workers who were under observation. Face the future with innovation and efficiency. Innovation knows no bounds. Today, against the backdrop of achieving carbon peak and carbon neutrality, the Future Energy Coal-to-Oil Branch, guided by the five development concepts of innovation, coordination, greenness, openness, and sharing, offers a \"future solution\" to help coal chemical enterprises reduce emissions, pursue green development, and achieve sustainable growth. Once the projects on the research and application of LPG separation technology, low-temperature Fischer-Tropsch synthesis solid-liquid grading filtration technology and new filter elements, as well as the development and application of membrane separation technology for recovering low-carbon hydrocarbons from raw gas—all currently under construction—are completed and put into operation by the end of this year, the production efficiency and resource conversion rate of the coal-to-oil system will be further improved. Liu Yongbing explained that these technical upgrades are aimed at saving energy and reducing consumption, as well as increasing the added value of products; they will also further reduce the energy consumption and resource usage of coal liquefaction facilities, thereby improving their economic efficiency. For example, by separating components such as propylene, propane, and mixed C4 hydrocarbons from liquefied petroleum gas to produce products with stronger market competitiveness, the industrial chain can be extended and the product structure optimized, which is expected to generate an additional annual profit of 34.41 million yuan; through membrane separation of low-carbon hydrocarbon feed gases, 20,000 standard cubic meters of hydrogen and 8,000 tons of liquid products can be recovered per year, resulting in an annual profit of 11.02 million yuan. “Once the desalination unit of the \"environmental protection project\" is completed, it will not only reduce the costs associated with solid waste disposal and mitigate environmental risks, but also generate over 8,500 tons of by-products in the form of industrial-grade sodium chloride and sodium sulfate. “The stable operation of equipment is the foundation for energy conservation and cost reduction, while strengthening management remains an eternal priority for enterprises. With technological progress, there is still room to further tap into potential through technical upgrades and improvements. ”Zhu Qingrui, Secretary of the Party Committee and General Manager of Future Energy Company, said that low-temperature Fischer-Tropsch synthesis, as a strategic reserve technology for coal-to-oil conversion, has already reached maturity. It is necessary to innovate in process routes and continuously extend the industrial chain. During the 14th Five-Year Plan period, industrial validation of high-temperature Fischer-Tropsch synthesis should be completed, with the aim of developing high-carbon alcohols, high-end polyolefins, highly clean petroleum products, and high-end fine chemicals that are in urgent demand in China. This will further promote the organic integration of the coal chemical and petrochemical industries, enabling flexible production of petroleum products and chemicals, complementary advantages, and flexible adjustment of the product portfolio. At the same time, the production capacity for refined FTO waxes will be expanded, with more high-end products such as high-melting-point FTO waxes being manufactured, in order to continuously meet the public’s demand for a higher quality of life.