The localization of coal chemical processing equipment is in progress now

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The continuous rise in international oil prices has made the Chinese people look forward even more to the early operation of coal-to-oil projects. Recently, the world’s first coal direct liquefaction demonstration plant – Shenhua Group’s million-ton-scale coal direct liquefaction project – has entered the commissioning phase, with commercial operation planned for the second half of the year. What concerns industry professionals the most is the technical stability and operational reliability of the first coal direct liquefaction plants, as well as how to achieve domestic production of the key equipment for future multi-unit coal-to-oil plants with a capacity of 5 million tons each. The first set of core equipment was mainly imported. Since this is the first coal direct liquefaction project to be built in China, there is no existing experience to draw on; therefore, the core processes and equipment for Shenhua’s million-ton-scale project are of an exploratory nature. Although Shenhua uses self-developed process technologies, it relies on imports for its core equipment. Introduction is a \"double-edged sword\"; although it reduces certain driving risks, it also makes one dependent on foreign countries, thereby **increasing the investment and operational costs of the project. At present, the total investment in Shenhua’s demonstration project has increased from the originally planned 7.9 billion yuan to 13 billion yuan at present. The additional funds are mainly used for infrastructure construction, the acquisition of key equipment, and the purchase of spare parts. Of the total investment, equipment costs account for 53%. According to the reporter’s findings, during the negotiations to introduce key equipment, foreign companies took the opportunity to keep raising prices; for example, the price of a high-thrust hydrogen reciprocating pump increased from over $2 million to $3.6 million. A mechanical expert believes that, after being improved through domestic research and development, this set of equipment can be acquired for as little as 10 million RMB. But in order to buy time and ensure the successful launch of the project, Shenhua had to invest heavily to bring it in. At present, the Shenhua demonstration project has a total of 2,860 mechanical and electrical devices, of which imported devices account for 26% of the total; imported technologies and equipment make up over 35% of the total cost. Furthermore, the replacement of equipment components and spare parts imported also comes at a high cost. To cover the needs for spare parts over two years is equivalent to purchasing a new device; moreover, if the device fails, there is a risk that help from afar may not be sufficient to resolve the problem. Initial progress has been made in the localization of key equipment; obviously, the localization of such critical equipment has become a \"bottleneck\" hindering the development of China’s coal chemical industry. In fact, Shenhua Group took proactive measures right from the initial planning stage, beginning to work on the domestic development of key equipment. In 2002, Shenhua began discussions with Shanghai Electric Group on the localization of equipment ； In 2005, Shenhua, Shanghai Electric, and Sinopec Engineering Construction Company (SEI) collaborated to carry out six specific research projects. Initial results have been achieved over the past two years. The Shenhua Direct Coal-to-Oil Pilot Plant located in Shanghai uses various models of slurry pump prototypes developed by Shanghai Electric. Since its installation in August 2006, and after numerous test runs, it is currently performing well. The constant-bottom pump and reduced-bottom pump, developed by the research team and the Shanghai Coal Liquefaction Research Center, have been continuously improved to resolve sealing leakage issues, and they operate properly at the pilot plant as well. In addition, progress has also been made in the development of high-pressure coal slurry feed pumps; a special flushing and sealing structure for the hydraulic section has been developed. This technology has been approved by experts, and a **patent application has been filed. Although significant achievements have been made through tripartite cooperation, there are still issues in areas such as the development system, funding, talent, and domestically produced alloy materials. In particular, the public testing platform construction project has not yet been implemented, as it involves issues such as site selection, external public facilities, and funding requirements. Faced with Shenhua’s Phase II coal-to-oil production lines with a capacity of 3 to 5 million tons per year, the 3 million-ton coal indirect liquefaction plant that Shenhua plans to build in Ningxia, as well as the various coal chemical integrated production projects that have been approved or are under approval in this sector, it is clear that China’s equipment manufacturing industry is not yet capable of meeting the huge demand for domestic production of key equipment used in coal chemistry. To make breakthroughs, focus must be placed on developing large-scale equipment. In January of this year, the **National Development and Reform Commission issued a notice regarding the Special Plan for the Development of Major Scientific and Technical Equipment and Key Industrial Technologies during the 11th Five-Year Plan period**, once again including large-scale coal chemical processing equipment among the projects that are subject to special attention. Before the Spring Festival, Shenhua, Shanghai Electric, and SEI formed a high-level leadership group for the localization of coal direct liquefaction equipment; the three parties held meetings to implement the tasks related to this localization effort. Experts are acutely aware of the immense challenges ahead and hope to receive support from various sectors of society; just as different industries have come together to advance China’s aerospace technology, they aim to make the localization of coal chemical equipment a project involving thousands of people in its production. Experts put forward specific suggestions: first, the coordination mechanism needs to be upgraded. Currently, many provinces and cities have established working groups for the localization of coal chemical equipment, with numerous enterprises collaborating on research projects with scientific research institutions and universities. If **relevant departments are involved, a high-level coordination platform is established to leverage national resources for joint efforts and enhance system integration, which can achieve twice the result with half the effort. Second, in terms of capital investment, priority is given to the support systems for independent innovation. China’s high-end equipment industry has a weak foundation and a large gap compared to the world’s advanced levels. Establishing innovative mechanisms and adhering to independent research and development require substantial funding. Chen Songye, director of Shanghai Electric’s coal-to-oil equipment division, said, \"We have invested tens of millions of yuan in the research and development of mechanical equipment. However, many companies have low added value for their existing products and thin profits; adding more investment in technology and retaining talent pose significant financial challenges.\" We hope that in addition to macro-policy support, **special funds can be established to support research and development. ” Third is to carry out introduction, digestion, absorption, and re-innovation. Make every effort to monitor the usage of imported equipment in Shenhua’s demonstration projects, develop plans for introducing such technology and then adapting it through innovation, acquire core technologies with independent intellectual property rights, and enhance core competitiveness ； At the same time, domestic enterprises are encouraged to actively collaborate with internationally renowned companies on equipment development, and to introduce design and manufacturing technologies when necessary. Fourth, it is an urgent task to establish a public testing platform for coal liquefaction equipment development as soon as possible. Urgently apply to the **relevant departments for project approval, secure funding sources, complete the project proposal and feasibility study, carry out the preliminary design, and start construction as soon as possible.