Economic analysis of syngas production by gasification

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For this plan, the gasifier configuration is two in operation and one as backup. The synthetic gas production capacity of a single gasification furnace is 131,486 Nm3/h. With an annual methanol production of 300 kt, the excess syngas is supplied to external parties. The input and output of syngas produced by gasification are shown in Table 1. Table 1: Input and Output Summary for Syngas Production via Coal Gasification
| Item | Quantity | Total/CNY·h-1 |
|------|----------|----------------|
| Raw materials | 103 | 503.78 |
| Coal (247.7 CNY/t) | t·h-1 | 135.35; 33,526 |
| Industrial water (1.4 CNY/t) | t·h-1 | 771; 1,079.4 |
| Oxygen (446 CNY/t) | Nm3·h-1 | 76; 512,487 |
| Water (4.2 CNY/t) | t·h-1 | 93.9; 394.38 |
| Electricity (0.5 CNY/kW·h) | kW·h | 23,800; 11,900 |
| Coal storage cost (31.3 CNY/t) | t·h-1 | 104; 3,255 |
| Recycled water (0.23 CNY/t) | t·h-1 | 20,000; 4,600 |
| By-products | 84 | 319 |
| Slag (18.72 CNY/t) | t·h-1 | 30.06; -563 |
| Syngas as fuel (500 CNY/t) | Nm3·h-1 | 165; 213,155 (155.3 t); -77,650 |
| Medium-pressure steam (90 CNY/t) | t·h-1 | 41; -3,690 |
| Sulfur (585 CNY/t) | t·h-1 | 4.13; -2,416 |
| Fixed assets/10,000 CNY | — | 155,895; 16,741 |
| Coal preparation system | 2,976 | — |
| Gasification unit | 69,195 | — |
| Acid gas removal | 16,555 | — |
| Cryogenic separation | 9,466 | — |
| Flue gas compression | 4,820 | — |
| Methanol production unit | 30,000 | — |
| Sulfur recovery unit | 21,533 | — |
| Land (300 CNY/m2) | m2 | 1,350; 45,000 |
| Other costs | 3,750 | — |
| Product: Methanol | t·h-1 | 37.5; 958 |

As can be seen from Table 1, the annual production of 300 kt of methanol from coal via gasification results in a cost of 958 CNY per ton. This is mainly due to the low price of raw coal, as well as the use of syngas—a by-product—as fuel, which adds value to the process. Annual after-tax profit = (1,900 – 958) × 37.5 × 8,000 × (1 – 15%) ÷ 10,000 = 24,021 (10,000 yuan); the investment return rate after income tax is: 24,021 ÷ 155,895 × 100% = 15.41%. Therefore, producing methanol from coal as a raw material results in low production costs, strong resistance to market risks, and high return on investment. Due to high fixed asset investment, the larger the scale, the better the efficiency. All excess syngas is sent to the gas power plant at the Yangzi-BASF integrated petrochemical complex in the Nanjing Chemical Industrial Park as fuel. Therefore, a gasification process capable of producing 300 kt of methanol per year for supply to the acetic acid plant in the Nanjing Chemical Industrial Park represents a good option as a process design. 2.2 Production of methanol from natural gas and economic analysis: The use of natural gas to produce methanol is common both domestically and internationally. Its main purpose is to use low-cost natural gas resources to produce methanol, which facilitates transportation and enables the realization of the value of those natural gas resources. In the Nanjing area, there are no low-cost natural gas resources. It is clearly uneconomical to purchase new equipment and use natural gas from the \"West-to-East Gas Transmission\" project to produce methanol. However, given that Sinopec Yangzi Petrochemical Co., Ltd. (hereinafter referred to as Yangzi Petrochemical), located near the Nanjing Chemical Industrial Park, has excess production capacity in its hydrogen production facilities, it is worth considering the possibility of utilizing this idle capacity to produce syngas, which could then be used to manufacture the methanol required by the acetic acid plants in the Nanjing Chemical Industrial Park. 2.2.1 Introduction to Natural Gas-Based Syngas Production Numerous production methods can be used to generate syngas, which is required for the manufacture of various major petrochemicals: (1) Methane steam reforming ； (2) Naphtha conversion method ； (3) Autocaloric conversion method ； (4) Oxygenation secondary conversion method ； (5) Various hydrocarbons, petroleum coke, and partial oxidation of coal ； (6) Hydrogen and carbon dioxide reverse transformation method. The above process methods (1) and (2) can be directly applied to the hydrogen production unit at Yangzi Petrochemical. Given that naphtha is used as a raw material for producing syngas, and its market price is much higher than that of natural gas, it is clearly not advisable to use naphtha as a raw material for syngas production. Other methods require the purchase of new equipment, making them even less suitable for Nanjing, where there is a shortage of cheap natural gas resources for methanol production. The variation in the H2/CO ratio of syngas produced by synthetic gas industrial production technologies is approximately 6 to 1.5. If there is a high demand for pure hydrogen in the vicinity, hydrogen can be separated from syngas and sold. Without a large hydrogen-consuming source, it can only be used as fuel, which is extremely uneconomical. Methanol production is the largest user of syngas, which is its raw material. The hydrogen production unit at Yangzi Petrochemical, located near the Nanjing Chemical Industrial Park, consists of two parallel units, A and B, with a total hydrogen production capacity of 23,600 m3/h. Since it was built and put into operation in 1989, it has been in use for 15 years now; its asset depreciation has been completed, leaving its net asset value at almost zero. Due to the numerous upgrades carried out on the aromatics complex at Yangzi Petrochemical over the past 10 years, the hydrogen produced as a by-product of the reforming units has increased, while the demand for hydrogen in the main hydrogen-consuming units, such as the hydrocracking unit, has remained relatively stable. As a result, operating 50% to 80% of the capacity of the Hydrogen Production Unit A is sufficient to meet the hydrogen needs of the aromatics complex, whereas the Hydrogen Production Unit B has been shut down for extended periods of time. Therefore, idle equipment can be utilized to produce industrial methanol, which is in short supply in the surrounding market. 2.2.2 Economic analysis of hydrogen production retrofit for syngas generation: The requirements for syngas in methanol production are: CO, 29.90% ； H2, 67.64% ； CO2, 2.49% ； (4.85 MPa, 35 ℃) ； Other impurities are minor. However, using natural gas as the feedstock with a water-to-carbon ratio of 3.05, the composition of the dry gas obtained at an outlet temperature of 820°C in the steam reformer of the hydrogen production unit is as follows: CH4, 2.7%; H2, 70.5%; CO, 13.5%; CO2, 13.3%. At 100% load of the ice production unit series, the total volume of dry gas in the conversion gas is approximately 72,000 m3/h. The converted dry gas cannot be used directly as a feedstock for methanol plants; it is necessary to use CO2 removal units at the outlet of the conversion furnace, as well as additional deep cryogenic separation units, to produce syngas that meets the requirements of methanol production plants. An annual production of 300 kt of methanol requires 92,842 m3/h of syngas that meets the specified requirements. The additional investment in the separation equipment is: 1 billion yuan. The cost calculation for producing syngas in the hydrogen production plant is shown in Table 2. Table 2: Summary of inputs and outputs for producing syngas via natural gas steam reforming
| Item | Quantity | Total/CNY·h-1 |
|------|----------|---------------|
| Raw materials | 51 | 824 |
| Natural gas (fuel) (1.31 CNY/Nm3·h-1) | 35,129 | 46,019 |
| Cooling water (0.23 CNY/m3)/m3·h-1 | 1,500 | 345 |
| Nitrogen gas (0.20 CNY/Nm3·h-1) | 200 | 40 |
| Deionized water (13 CNY/t)/t·h-1 | 140 | 1,820 |
| Electricity (0.5 kW·h)/kW·h | 7,200 | 3,600 |
| By-products | – | -3,200 |
| High-pressure steam (-80 CNY/t)/t·h-1 | 40 | -3,200 |
| Fixed assets/10,000 CNY | 2,708 | – |
| Renovation costs | 10,000 | 833 |
| Annual wages and management costs | 1,000 | 1,250 |
| Annual maintenance costs | 500 | 625 |
| Product: Carbynyl syngas/Nm3·h-1 | 92,842 | – |
| Variable cost of syngas/CNY·m3 | 0.524 | – |
| Total cost of syngas/CNY·m3 | 0.533 | – |
As can be seen from Table 2, the consumption of natural gas and its price have the greatest impact. Therefore, it is also crucial to keep the natural gas purchase price at 1.31 yuan/m3, and this must be specified in the supply contract. 2.2.3 Economic analysis of converting the facility for hydrogen production to synthetic gas production for methanol manufacture: Based on an annual production capacity of 300 kt of methanol, the investment required for this conversion is estimated at 300 million yuan. With a raw material flow rate of 92,842 Nm3/h, 37.5 t/h of methanol can be produced. The methanol cost calculation is shown in Table 3 (the syngas price is given in Table 2 above). Table 3 Methanol Economic Analysis
Item | Quantity | Total/CNY·h-1
--- | --- | ---
Raw materials | 54 | 349.5
Syngas (0.553 CNY/Nm3) | 92 | 842
51 | 342
Cooling water (0.23 CNY/m3) | 1,800 | 414
Desalinated water (1.87 CNY/t) | 50 | 93.5
Electricity (0.5 kW·h) | 5,000 | 2,500
By-products | – | -2,000
Low-pressure steam (-50 CNY/t) | 40 | -2,000
Fixed assets/10,000 CNY | 4,561
Wages and management costs | 500 | 625
Manufacturing costs | 30,000 | 2,500
Other costs | 1,098 |
Maintenance costs | 338 |
Product: Methanol/t·h-1 | 37.5
Variable costs/CNY·t-1 | 1,396
Total cost of product/CNY·t-1 | 1,518
At a market average price of 1,900 CNY/t for methanol, an annual production capacity of 300 kt of methanol can generate a profit of: (1,900 – 1,518) × 37.5 × 8,000 ÷ 10,000 = 11,460 (10,000 CNY). The after-tax profit is 97,410,000 CNY (with a tax rate of 15%), resulting in an investment return rate after taxes of: 97,410,000 ÷ 40,000 × 100% = 24.35%. It can be seen that by upgrading existing facilities, without adding personnel, land, or utility services, and without altering the properties of hydrogen—the main product of the hydrogen production plant—efficiency can be improved, thereby yielding certain economic benefits. It is indeed a good investment option. 2.3 Comparison of the two methanol production methods The two processes for methanol production are listed in Table 4. Table 4 Comparison of the two methanol production methods Item Methanol production via coal gasification Methanol production using natural gas as raw material Evaluation Total investment: 1,558.95 million yuan; 400 million yuan. The latter requires less investment. Production scale: Can produce over 300 kt/a of methanol; limited to 300 kt/a. The former has a higher production capacity. Production conditions: It is necessary to find a market for the by-product fuel gas; the supply of gas from western regions to the east must be reliable. The conditions for the former are more stringent. Production cost: 958 yuan/t; 1,518 yuan/t. The cost of the former is significantly lower. After-tax return on investment: 15.41%; 23.35%. The latter yields a higher return. Environmental impact: Higher investment required for environmental protection measures; no pollution. The former is subject to environmental restrictions. Both methods have their advantages and disadvantages. In the long term, by choosing the gasification process, it is possible to produce products that meet the needs of various users, and the cost of these products is much lower than their market price. This approach provides strong resistance to market risks, and the production capacity can meet the future demand for 600 kt/a of methanol required for the expansion of acetic acid production. Therefore, for the 600 kt/a acetic acid project in the Nanjing area, gasification-based methanol production is more competitive in the market compared to natural gas-based methanol production, and it offers better economic prospects for future expansion. 3 Analysis of the optimal portfolio investment approach: The 300 kt/a ammonia synthesis plant owned by Nanhua Group Company, located near the Nanjing Chemical Industrial Park, has been suffering severe production losses due to a chronic shortage of raw materials for the gasifiers that use tar and asphalt as feedstocks. The company plans to switch to a gasification process starting in 2005 to produce syngas, from which hydrogen will be separated for use in the ammonia synthesis plant, in an effort to turn that plant around and improve its profitability. By integrating this gasification unit with the syngas project required for 300 kt/a of methanol, investment costs can be reduced, and the utilization rates of products and by-products can be improved, resulting in very attractive prospects for overall economic benefits. 3.1 Feasibility analysis of investment project integration: A single Texaco gasification furnace can produce 131,486 Nm3/h of gas (with H2 at 37.13%, CO at 45.46%, CO2 at 15.52%, and other impurities). Theoretically, 300 kt/a of ammonia production requires 10,000 Nm3/h of hydrogen (>95% purity), while 300 kt/a of methanol production needs 92,842 Nm3/h of syngas (with H2 at 67.64%, CO at 29.9%, and CO2 at 2.49%). Clearly, two gasification units in operation along with one standby unit is sufficient to meet both the hydrogen demand for 300 kt/a of ammonia production and the syngas demand for 300 kt/a of methanol production. Therefore, it is a feasible solution to share a single gasification unit for 300 kt/a ammonia synthesis and 300 kt/a methanol production. This helps to avoid duplicate investment in projects within the same area, activates state-owned assets, increases their value, and ensures they are utilized to the fullest extent. At the same time, it allows for optimal use of resources in surrounding areas, resulting in a win-win situation for all parties involved. 3.2 Economic analysis of investment project integration: Project integration can reduce equipment investment. The original 300 kt/a ammonia synthesis plant had a syngas cooling box separation system, which reduced investment by 94.66 million yuan and saved land costs by 13.5 million yuan (see Table 1 for details). The integrated coal gasification investment project produces 300 kt of methanol per year, with a production cost of 868 yuan per ton. This is lower than the cost of building a coal gasification facility dedicated to methanol production at the same capacity (958 yuan per ton). The annual cost savings for this project amount to: (958 – 868) × 30 = 27 million yuan. In addition, the price of hydrogen for 300 kt of synthetic ammonia is 3,000 yuan per ton, which is an extremely low price that enables synthetic ammonia projects to achieve greater efficiency. Therefore, the project integrates coal gasification to produce 300 kt of synthetic ammonia and 300 kt of methanol per year, resulting in even more outstanding economic efficiency. 4 Conclusion The new acetic acid production project with an annual capacity of 600 kt in the Nanjing Chemical Industrial Park provides an opportunity to integrate the resources for hydrogen, syngas, and synthetic ammonia production in the Dachang area of Nanjing. Through optimized combinations, resource utilization is high, economic benefits are significant, and state-owned assets are also enhanced in value. Therefore, using gasification to produce methanol and synthetic ammonia is the best investment option.