How to cope with rising natural gas prices in ammonia synthesis
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A rise in natural gas prices is inevitable, which leads to an increase in the costs of numerous large, medium, and small fertilizer production facilities. Moreover, there have been many new fertilizer plants built recently, making it difficult for fertilizer prices to rise in tandem. Colleagues, what is your situation?
Only by adapting to the trends of the times can enterprises survive. The rise in energy prices will not stop, unless there are breakthroughs in new technologies that lead to the development of low-cost alternative energy sources. If companies want to survive in the long term or achieve good economic results, they must keep reducing production and operating costs – some companies will fail while others will become stronger. This is the driving force behind social progress, the driving force behind the development of productivity!
1. The production of synthetic ammonia using natural gas as a raw material is the dominant method worldwide, with comprehensive energy consumption that is nearly 50% lower compared to producing synthetic ammonia from coal. 2. At present, the energy consumption level of large nitrogen fertilizer plants in China that use natural gas as raw material is close to international advanced levels, and they will remain competitive in the near future. 3. China’s energy landscape, characterized by a shortage of oil and gas but an abundance of coal, means that the use of natural gas to produce ammonia or methanol can no longer be continued; recently, the National Development and Reform Commission has also introduced relevant policies in this regard. 4. China’s energy situation means that coal will remain the main raw material for synthetic ammonia in the future. Despite having access to natural gas, Zhonghai Chemical partnered with Jincheng City this week to establish a new company in Jincheng, Shanxi, aimed at building a plant that can produce 1 million tons of urea per year using coal as the raw material. Zhonghai Chemical is currently the most competitive company in China in terms of producing nitrogen fertilizers from natural gas, and this explains why. 5. At present, Henan Zhongyuan Dahuahua, a representative enterprise that uses natural gas as raw material for the production of nitrogen-based fertilizers, can only maintain less than 50% of its production capacity; Hebei Cangzhou Dahuahua’s shutdown for several months last year is the best example of this. 6. However, in regions rich in natural gas such as Sichuan, it will remain the backbone of China’s large-scale nitrogen fertilizer production for a considerable time to come. 7. In short, China’s production of synthetic ammonia using natural gas as a raw material will not expand any further; it will only remain stable or decline. 8. The newly developed natural gas resources will be primarily used for domestic gas supply and power generation in the eastern region.
The orientation of the Natural Gas Utilization Policy is already quite clear.
Achieve a comprehensive balance. As natural gas prices rise, related energy costs also increase. When coal prices go up, if there are price limits on the production of synthetic ammonia and urea, investment will decline. Moreover, rising fertilizer prices will lead to higher food prices – this is a matter of overall balance ； However, my view on this industry is that a circular economy approach should be considered; given our country’s abundant coal resources, ammonia should be combined with alcohols organically, that is, by developing ammonia-alcohol combined systems ； Moreover, as two basic raw materials—ammonia and methanol—it is possible to produce all the products one can imagine; let’s strive for it, as this is the direction of development.