The progress of Shenhua’s coal chemical industry

Shenhua’s coal-to-oil project seems to have started operations in 2008

The coal-to-olefins project in Baotou – I heard that the bidding process is not yet over. People within Shenhua have already started arguing about this, haha. The start date specified in the initial design has already passed

Coal-to-oil project: Scheduled to go into operation in 2008. Coal chemical industry: The basic design for methanol has been completed entirely; the basic design for the remaining projects will be finished successively in the first and second quarters of this year. The EPC tenders will have their winners determined one after another this year. Material feeding in 2010

The coal-to-oil project is scheduled to go into operation in mid-2008

Shenhua’s coal-to-oil project is still in the preparatory stage before it can start operating. The coal-to-hydrogen unit used to produce hydrogen for the coal liquefaction process will not be able to begin operations until at least the second quarter of this year. As for the production of oil, that is still a long way off.

Large state-owned enterprises cannot establish monopolies; their ultimate fate is extinction, replaced by new mechanisms.

I heard that they seem to be planning to produce hydrogen using gas as well. Three insurances!

The Baotou olefins project should start operations around 2010; currently, the equipment is under bidding process

Coal-to-oil projects are rushing to install natural gas-based hydrogen production facilities, mainly to prevent difficulties in starting up the Shell gasification units due to unstable hydrogen supply!

The coal-to-oil project is scheduled to go into operation in mid-2008

The cost of producing oil from coal is too high; it’s unclear when true industrialization will occur

There are two purposes for using natural gas to produce hydrogen: 1； The operation of SHELL gasification units in China is currently not smooth, with poor stability; meanwhile, coal liquefaction plants require two SHELL gasification units to operate simultaneously in order to meet production demands. Given the current circumstances, this seems to be very difficult; therefore, a natural gas-based hydrogen production system can effectively balance the overall hydrogen supply in the plant. In this way, even if one of the SHELL gasification units has to be shut down, the coal liquefaction unit can still operate at 70–80% capacity. 2 ； The Shenhua coal-to-oil project has installed an FTO synthesis indirect liquefaction unit with a capacity of 180,000 tons per year, which requires more than 100,000 cubic meters of syngas per hour. To ensure a balanced gas supply for the entire plant, Shenhua has set up a system for producing hydrogen from natural gas.

Has all the liquefaction equipment for Shenhua been installed? Has the Shell gasifier been tested?

I heard that the olefin project isn’t progressing very well. Does anyone who knows the actual situation know what’s going on?

I have compiled some information on the engineering, technology, and project details of Shenhua Group to share with my peers for their reference. Shenhua Group’s Projects: I. The preparatory work for the Shenhua Baotou coal chemical project is progressing smoothly. Located in Baotou, the Shenhua coal chemical project offers a new chemical pathway for China to alleviate oil shortages and ensure energy security. It will provide significant impetus for extending the coal industry chain, adjusting the structure of industrial products, and enhancing the sustainable development capacity of Baotou as well as the entire autonomous region. The total investment in this project is over 12.4 billion yuan. It is estimated that once the project is completed and put into operation, it will generate annual sales revenue of over 7 billion yuan, after-tax profits of over 1.1 billion yuan, and tax payments of over 100 million yuan. All tasks related to the company registration, selection of the office building location, and construction design for this project have been fully launched in accordance with the scheduled timeline, and progress is going well. II. In August 2004, Shenhua Group’s industrial direct liquefaction facility for coal-to-oil production was put into operation in Ordos City, Inner Mongolia Autonomous Region. This marked the first time that coal-to-oil production in China moved from laboratory-scale facilities to actual industrial production. The total capacity of this project is 5 million tons of oil products per year, with construction carried out in two phases. Phase 1 has a capacity of 3.2 million tons of oil products per year and consists of three main production lines, including 14 major production units such as coal liquefaction, coal-to-hydrogen, solvent hydrogenation, hydroprocessing, and catalyst preparation. The total investment for the first phase is 24.5 billion yuan. Once it is put into operation, it will consume 9.7 million tons of coal per year, and be able to produce 3.2 million tons of various petroleum products, including 500,000 tons of gasoline, 2.15 million tons of diesel, 310,000 tons of liquefied gas, and 240,000 tons of benzene and mixed xylene. To effectively avoid and reduce risks, the project adopted a phased implementation approach: first, a production line with an annual capacity of 1.08 million tons was built, and after the facility began operating stably, additional production lines were constructed. The first production line was completed in 2007, while two production lines were ready by around 2010. III. Shenhua Group enters the coal chemical industry in Xinjiang. At present, the Xinjiang Uygur Autonomous Region has established a development strategy that involves making use of coal resources to promote the construction of large-scale mining areas and coal power plants, accelerating the integration of Xinjiang’s power grid with those in the northwest region, and developing integrated projects such as those involving coal-to-electricity-aluminum, coal-to-electricity-copper, coal chemicals, and coal-to-oil processes. In April 2005, Shenhua Group signed a framework agreement with the People’s Government of the Xinjiang Uyghur Autonomous Region for the development of coal resources in Xinjiang, and thus Shenhua Group entered the field of coal chemical industry in Xinjiang. To support Shenhua Group’s project development in Xinjiang and to coordinate the resolution of issues that arise during construction, the Xinjiang Uyghur Autonomous Region has established a special project leadership team, which will provide preferential treatment in terms of land, resources, and other related policies. In terms of Shenhua’s technology: First, China has currently mastered relatively mature direct coal liquefaction technology. On the basis of a thorough comparison of domestic and international coal direct liquefaction technologies, Shenhua Group has adopted the strengths of various approaches along with mature unit process technologies to develop its own coal liquefaction process routes and catalyst synthesis techniques. Based on an anhydrous, ash-free coal, the oil yield for fractions above C4 ranges from 57% to 58%; the increase in the heavy fractions of the oil makes it more suitable for the production of diesel products. The catalyst exhibits very high activity. The 863 catalyst preparation facility at the Beijing Coal Chemical Engineering Research Institute, which is part of the China National Coal Science and Technology Group Corporation, features a simple production process, stable operation, and low costs (one-third to one-sixth of those of foreign catalysts). In September 2004, a facility for the development of direct coal liquefaction processes was built in Shanghai, to provide support for future scale-up efforts and the optimization of industrial plant operations. II. On the basis of developing the \"new process for direct liquefaction of Shenhua coal,\" a process test unit was built. Between October and December 2004, tests were conducted on solvent hydrogenation, continuous operation with hot oil, and a 23-hour feed operation, thereby establishing the liquefaction process and achieving the development goals. Basic research and process development for a new CDCL direct liquefaction process suitable for Chinese coal types and qualities have already begun. III. In terms of direct liquefaction catalysts, the Beijing Coal Chemical Engineering Research Institute under the China Coal Research Institute has established a continuous production line for highly dispersed catalysts; nanoscale catalyst products were successfully produced, and coal direct liquefaction tests were carried out using a 100 kg/d continuous test facility. The results show that, compared with conventional ultra-fine ground natural mineral catalysts, using only about 3/4 of this catalyst amount can increase the yield of liquefied oil by approximately 4% (on a dry coal basis). In terms of the liquefaction process, through optimization experiments based on the technical approach of Shenhua Group’s 1 million tons per year coal direct liquefaction demonstration project, a new coal direct liquefaction process has been developed. The PDU test facility, capable of processing 6 tons of coal per day and currently under construction, will be used to further develop and validate this process, serving as the technical foundation for China’s first industrial demonstration line for coal direct liquefaction. Project: 1. Shenhua Group, **Kerry Chemical Co., Ltd., and Baotou Tomorrow Technology Co., Ltd. are jointly investing in an 1.8 million tons per year methanol project in Inner Mongolia. 2. The coal field in eastern Junggar, Xinjiang, has become the area chosen by Shenhua Group to build a power plant with a capacity of 3 million kilowatts and facilities for producing over 10 million tons of petroleum products per year. Xinjiang holds 35% of China’s coal resources, and it is currently making active efforts to develop large-scale mining areas and coal-fired power bases, with the aim of achieving further progress in integrated projects related to coal, electricity, oil, and other related sectors. Shenhua Group’s decision to build a large-scale coal-to-oil facility in Xinjiang has received significant attention from the region; the autonomous region established a high-level team specifically to support Shenhua Group’s construction project. 3. Shenhua Group and Ningxia Coal Industry Group have made progress in the preliminary research phase for building commercial indirect liquefaction plants capable of producing 3.2 million tons of products per year. Both projects plan to rely primarily on advanced foreign large-scale synthetic oil technologies, with the main products being engine fuel oils and substitutes for petrochemical products. Currently, both projects are in the preparatory stage of technical and commercial negotiations prior to construction, with completion of the project construction expected between 2008 and 2010. 4. The plan to convert coal into gasoline and diesel is being actively implemented by China’s two most powerful coal companies – Shenhua Group and Yankuang Group. Shenhua’s project in Ordos began construction in August 2005, with operations set to start in 2007 ； The pilot study project on coal-to-oil conversion using Yankuang coal passed the expert review at the end of January 2006, and applications are now being submitted for its industrial implementation. 5. Dow Chemical established its third global Dow Center in Zhangjiang, Shanghai ； Planning to invest in a new chemical project in Zhangjiagang ； The coal-to-olefins project of Shenhua Energy is expected to enter the feasibility study phase. Dow Chemical is working together with Shenhua Group on the coal-to-olefins project (\"coal to oil\"). To address the technical challenges that may arise in large-scale coal chemical projects, particularly those related to the methanol-to-olefins (MTO) process, in August 2005, the National Development and Reform Commission and Dow Chemical jointly organized a technical exchange meeting on coal chemicals in Beidaihe. The company and Shenhua Group spent six months to a year to advance the project from the pre-feasibility study stage to the feasibility study stage.

The progress of Shenhua’s coal-to-oil project is really too slow!! I think so!!

There should be another reason as well: producing hydrogen from natural gas results in fewer carbon dioxide emissions

3# wildhalf: Does anyone know what stage the coal-to-olefins project is at currently? Has the bidding process for purchasing equipment for the instrumentation and control systems started?