The National Development and Reform Commission conducted its first investigation into Shell’s gasification technology. According to the relevant department of the National Development and Reform Commission, as per the commission’s investigation instructions, starting from January 10th, information on the operational status of nearly 10 large fertilizer manufacturers in China that have adopted Shell’s gasification technology has been gradually compiled and submitted to the National Development and Reform Commission. This is the first time the National Development and Reform Commission has conducted a comprehensive investigation into a gasification technology introduced from abroad. It is understood that since the 1990s, due to the soaring international oil prices, more than a dozen domestic ammonia synthesis plants that used oil as a raw material ceased operations one after another due to huge losses. These companies decided to carry out projects to switch from oil to coal, and jointly acquired Shell’s gasification technology equipment. To date, domestic companies have signed 6 contracts to adopt Shell’s gasification technology. This technology is primarily used in large fertilizer manufacturers to transform the raw materials and energy sources used in nitrogen fertilizer production, by replacing oil-based gasification processes as well as small-scale fixed-bed coal gasification processes with large-bed powder coal gasification processes for the production of ammonia and methanol. It is also utilized in the hydrogen production units of China’s first coal-to-oil project. Shell’s gasification technology has been highly recognized by industry professionals for its efficient and clean utilization of coal. With China’s rising energy demand and growing environmental awareness, Shell’s gasification technology has played an important role. However, since this technology has not been put into industrial use in the chemical industry to date, some experts hold different views on the large-scale adoption of Shell’s powder gasification technology and equipment. They argue that the gasifiers and waste heat boilers are too complex to manufacture, and all the key components must be imported; this results in high investment costs. Moreover, the complexity of the waste heat boilers increases these costs further. In their view, it is more reasonable to use direct water cooling for chemical production processes that require steam. Furthermore, experts also believe that the power consumption required for drying, coal grinding, high-pressure nitrogen, and pressurizing the syngas used for regenerative cooling is relatively high. It is understood that our country was the first in the world to use Shell furnaces for nitrogen fertilizer production. Whether their unique design featuring pure oxygen combustion and a waste heat boiler can meet the requirements of nitrogen fertilizer production will have to be tested in practice. **The investigation carried out by the National Development and Reform Commission requires a comprehensive review of the project’s construction and production operations. The content includes the project construction plan, construction progress, project investment, sources of funding and completion status, the production and operation status of the project along with an analysis of its operational performance, an analysis of the project’s achievements in energy conservation, emission reduction and circular economy, as well as the existing problems in project construction and operation along with suggestions for future actions. Since the large-scale fluidized-bed gasification technology is not only the key technology for the transformation of nitrogen fertilizer production but also a common technology for industries such as coal-to-methanol, coal-to-oil, and coal-to-olefins, this investigation and summary are of great significance for guiding the healthy development of China’s emerging coal chemical industry. It is truly not easy to scale up advanced technologies – a report from companies that have adopted Shell’s gasification technology. At the end of 2007, Shell China Group announced that it had signed a gasification technology licensing agreement with Hebi Coal and Electricity Co., Ltd. for a project aimed at producing 600 kt of methanol per year. This is Shell’s 16th gasification technology licensing contract signed in China. It is reported that the 17th and 18th gasification technology licensing contracts are likely to be signed in 2008. It can be said that China is a blessed land for Shell’s gasification technology. In China, Shell’s gasification technology has taken the most crucial and challenging step toward practical application. At the time of introduction – companies sought out the \"most advanced\" technologies. Royal Dutch Shell is a world-renowned energy company with a history of over 100 years; its operations are spread across more than 140 countries around the globe, and in 2006 it ranked third on the list of the world’s top 500 companies. Since the 1970s, Shell has been researching coal gasification as a clean technology for utilizing coal. The development of this technology went through stages such as pilot tests, pilot plants, and industrial demonstration units; it took over 20 years before the new coal gasification technology was finally developed. In April 1997, a closed-door presentation on Shell’s gasification technology, attended by departments such as China’s Ministry of Science and Technology and Ministry of Electric Power, as well as companies like Sinopec, opened the way for this technology to enter China’s coal chemical industry market. 10 years later. Shell has signed 16 gasification technology licensing contracts in China, covering a total of 20 gasifiers. Nine of them are used for producing synthetic ammonia, 9 for producing methanol, and 2 for producing hydrogen. Since the successful commissioning of the coal gasification unit at Hubei Shuanghuan Technology Co., Ltd. on May 17, 2006, the coal gasification units at Sinopec Anqing Branch, the Sinopec Shell coal gasification joint venture, Sinopec Hubei Fertilizer Branch, and Guangxi Liuzhou Chemical Co., Ltd. have also been put into operation one after another. It has been found that domestic companies are particularly attracted to the following advantages of Shell’s gasification technology: (1) High efficiency. Thanks to dry feeding, the cold gas efficiency of Shell’s gasification technology can reach 80%–83%. A higher cold gas efficiency enables the carbon conversion rate to exceed 99% on the one hand, and minimizes heat loss on the other. (2) High productivity. Shell’s gasification technology, which uses a dry feed system, can achieve a yield of 90% for hydrogen and carbon monoxide in the crude syngas. In contrast, using a traditional feeding system can only achieve an output rate of 80%. (3) The applicable coal types are flexible. Due to the use of dry feeding, Shell’s gasification technology can be applied to a wide range of coal types, including lignite, bituminous coal, anthracite, and petroleum coke. (4) High reliability. The design life of the water wall in Shell’s gasifier is 25 years, while the design life of the burners is 1 year. Based on the operation of a power plant in the Netherlands that uses Shell’s gasification technology, the water wall of the gasifier has been in use for over 12 years, while the burners can have a maximum service life of 3 to 4 years. (5) The load is easy to adjust. The opposed multi-nozzle design of Shell’s gasification technology enables the gasifier to adjust the syngas output by shutting down one or more groups of nozzles. Another advantage of opposed multi-nozzles is that it is easier to increase the gasification capacity of the gasifier. (6) Environmentally friendly. The background of zero waste emission is an important reason why Shell’s gasification technology is highly favored. Since Shell’s gasification technology uses a fluidized-bed gasifier, the gasification temperature is high, which allows all the hydrocarbons in coal—including phenols and polyaromatic compounds—to be completely converted into carbon monoxide and hydrogen. The sulfur in coal can be recovered through the Claus process and sold as a chemical raw material. In terms of water, the use of dry ash removal reduces the amount of wastewater generated, and the wastewater discharged contains almost no volatile organic compounds, thereby making zero wastewater discharge possible. At the time of its establishment, companies found it to be quite effective; the first introductions of Shell’s gasification technology were mostly used to convert the fuel source in large domestic urea production plants from oil to coal. Hubei Shuanghuan Technology Co., Ltd. previously used a process of partial oxidation of heavy oil to produce 200 kt of synthetic ammonia per year, as well as a combined alkali production method to produce 600 kt of soda ash per year. The sharp rise in the price of heavy oil has led to a significant increase in the cost of synthetic ammonia. At the same time, the raw material gas for producing synthetic ammonia from heavy oil causes severe environmental pollution during the production process. In June 2001, the former **Economic and Trade Commission approved the use of Shell’s gasification technology to replace heavy oil gasification in the production of synthetic ammonia, thereby switching the raw material for synthetic ammonia from oil to coal. On May 17, 2006, the plant was successfully commissioned after the first coal feeding operation, making Shuanghuan Company the world’s first manufacturer to use Shell’s gasification technology for the production of synthetic ammonia. Wu Dangsheng, the former chairman of Shuanghuan Technology, said at the celebration meeting for the successful commissioning of the project that once the oil-to-coal conversion project was operational, the company could save 1.099 million yuan per day, resulting in annual cost savings of over 200 million yuan. The urea plant at Baling Petrochemical is one of the 13 large-scale fertilizer plants introduced to China in the 1970s, and it has been using naphtha as a raw material for production since its establishment. Zhang Deming, chairman of Sinopec Baling Petrochemical Company, said that following the successful first ignition and commissioning of the plant, the company’s synthetic ammonia production capacity would increase from 370 kt per year to 435.6 kt, while its urea production capacity would reach 640 kt. The plant would also produce 23 kt of sulfur per year. In addition, it would be possible to share liquid ammonia and hydrogen between the company’s caprolactam production unit and other processes, resulting in a significant reduction in the cost of urea. Liao Nengcheng, chairman of Liuzhou Chemical Industry Group Co., Ltd., said during the successful trial operation of the facility that with the introduction of Shell’s gasification technology, Liuzhou Chemical can now use inexpensive coal from Guangxi as a substitute for the expensive coal from Shanxi, thereby significantly reducing production costs. Upon the project’s commissioning, an additional 300 kt of synthetic ammonia can be produced, resulting in a 30% increase in production capacity. The specific consumption will drop from 16.8 kt of coal per ton of synthetic ammonia to 13–13.3 kt, resulting in a 38% reduction in the cost of synthetic ammonia, a 34% reduction in the cost of urea, and a 26% reduction in the cost of *AO acid. Its product prices can compete with those of the most advanced domestic nitrogen fertilizer manufacturers that use natural gas as a raw material, enabling it to rank among the leading nitrogen fertilizer companies in the country. After starting operations — the company faced numerous difficulties. To date, Chinese companies have signed 16 licensing agreements for gasification technology. Both the Shell gasification projects that are already in operation and those set to be commissioned have required huge amounts of capital. According to statistics, the total investment in the projects that have been put into operation by Hubei Shuanghuan Technology Co., Ltd. amounts to 829 million yuan. The investments in the oil-to-coal conversion projects carried out by Sinopec’s Hubei Fertilizer Branch and Anqing Branch each amount to 1.256 billion yuan. The total investment in the oil-to-coal conversion upgrade project at Baling Petrochemical is 1.533 billion yuan, while the total investment in Shell’s gasification project at Liuzhou Chemical Industry Group up to the stage of trial production is 687 million yuan. The investment in the planned Shell gasification projects is even more astonishing; the total investment in the two coal indirect liquefaction plants operated by Shenhua Ningmei amounts to 60 billion yuan. The total investments in the gasification projects of Yunnan Zhanhua and Yongcheng Coal Power, as well as Hebi Coal Power, which has just signed a contract, are 3.3 billion yuan, 6 billion yuan, and 3 billion yuan respectively. But after making massive investments, the company realized that scaling up an advanced technology that had never been used in large-scale industrial production was not an easy task. As the world’s first company to use Shell’s gasification technology for the production of synthetic ammonia, Hubei Shuanghuan Technology Co., Ltd. had to figure out the operating principles of the facility through trial and error, with no prior experience to draw on. Over the more than one year since its commissioning, the facility has faced continuous problems: the burner cover suffered burns and leaks, the gas transmission pipes in the gasifier were under excessive thermal stress, changes in the properties of the coal had a severe impact on the operation of the gasifier, the ventilation devices in the coal transportation system were damaged, and the internal components of the high-temperature and high-pressure filters were ruined. This led to reduced production capacity or even a complete shutdown of the system, making it impossible to achieve stable full-load operation over long periods of time, which put the company’s operations in a very difficult situation. The gasification unit at Sinopec Anqing Branch, which came online after completion, is currently shut down for maintenance, and the shutdown period has now reached 3 months. The maximum continuous operating time of this device is 60 days. It is reported that the gasification unit at Anqing Petrochemical is currently the one among Sinopec’s three subsidiaries whose Shell gasification unit has the longest continuous operation period. Since the oil-to-coal conversion unit of Sinopec Hubei Fertilizer Branch began trial production in 2006, its operation has gone through three main phases: the first was before April 2006, during which there were many sudden failures. Through efforts to address the issues, the main problems existing in the gasification unit have been solved ; Secondly, from April to July, the continuous operation time exceeded 30 days on two occasions, entering a stable operation state. Third, after August, through optimization and renovation, the operating cycle was further extended, allowing for 51 days of continuous operation, and the production benefits became evident. The company also admitted that, due to its initial lack of proficiency in these technologies and insufficient operational experience, there were many unplanned shutdowns during the early stages of equipment commissioning, resulting in high costs and a low annual production volume. By this point, companies expect Shell to show sincerity; all 5 coal gasification units currently in operation in the country face various technical problems that have not yet been resolved. Chinese companies hope that Shell can provide them with high-quality technical services free of charge; this will not only help maintain Shell’s good reputation both domestically and internationally, but it will also strengthen the confidence and determination of potential customers, especially private enterprises and smaller firms. Many companies have expressed the hope that Shell will adopt a more lenient policy regarding after-sales service for customers in China, providing free technical support for a certain period of time to help them get their equipment operating properly. For domestic enterprises, the process of introduction is also a process of learning, growing, and maturing. Many companies, while addressing problems that arise during the operation of their equipment, develop many new technologies suitable for their respective production facilities. For example, thanks to the efforts of the technical research team at Shuanghuan Company, the plant has undergone continuous technical upgrades, giving rise to a series of innovations; the process equipment of the plant has been successively improved. At present, the Shell gasification plant operated by Shuanghuan Company is running in a relatively stable condition, having reached a new record of 73 days of continuous operation. Therefore, enterprises are eager to have an authoritative agency take the lead, with Shell participating, so as to exchange knowledge while protecting their own intellectual property rights, share operational experience of relevant equipment, and gain a deeper understanding of new technologies. This will help the new device avoid unnecessary detours in its operation, allowing it to take advantage of the high benefits brought by new technologies as soon as possible. In China, there are 16 projects that have adopted Shell’s gasification technology. The Sinopec-Shell Gasification Joint Venture in Yueyang: it processes 2,000 tons of coal per day for the production of synthetic ammonia. Hubei Shuanghuan Technology Co., Ltd.: it processes 930 tons of coal per day for the production of synthetic ammonia ; Guangxi Liuzhou Chemical Co., Ltd.: Daily coal input of 1,100 tons, used for the production of synthetic ammonia; Sinopec Hubei Fertilizer Branch: Daily coal input of 2,000 tons, used for the production of synthetic ammonia; Sinopec Anqing Branch: Daily coal input of 2,000 tons, used for the production of synthetic ammonia ; Yunnan Tianan Chemical Co., Ltd.: 2,700 tons of coal are used per day for the production of synthetic ammonia ; Yunnan Zhanhua Co., Ltd.: Daily coal input of 2,100 tons, used for the production of synthetic ammonia ; Dalian Dahuahua Group Co., Ltd.: Daily coal input of 1,100 tons, used for methanol production ; Yongcheng Coal and Electricity (Group) Co., Ltd.: 21,000 t of coal is supplied per day for methanol production ; China Shenhua Coal-to-Oil Co., Ltd.: Daily coal input of 2×2200 t, used for hydrogen production ; Zhongyuan Dahuahua Co., Ltd.: 2,100 t of coal is fed in per day for methanol production ; Henan Kaixiang Chemical Co., Ltd.: 1,100 t of coal is used per day for methanol production ; Datang International Power Generation Co., Ltd.: Daily coal input of 3×4000 t, used for methanol production ; Tianjin Bohai Hua Er Group Tianjin Alkali Plant: Daily coal input of 2 X 2000 t, used for methanol production ; Guizhou Tianfu Chemical Co., Ltd.: 2,000 tons of coal are used per day for the production of synthetic ammonia and methanol ; Hebi Coal and Electricity Co., Ltd.: 2,700 tons of coal are used per day for the production of methanol.