Experts debate whether coal-to-natural gas is feasible or not
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Not long ago, the Chemical Industry News reported that the National Development and Reform Commission has approved the initiation of preliminary work on Datang International Power Generation Co., Ltd.’s coal-to-natural gas (SNG) project with a capacity of 4 billion Nm3 per year in Chifeng City, Inner Mongolia, as well as on Inner Mongolia HuiNeng Coal Chemical Co., Ltd.’s coal-to-natural gas project with a capacity of 1.6 billion Nm3 per year. This approval indicates that these two projects are likely to be launched soon, thereby filling a gap in China’s coal-to-natural gas industry. After the news was published, the reporter received many inquiries from experts and companies, which led to in-depth investigations and interviews. Experts are confident: the project is feasible and of great significance. During interviews, the reporter learned that, commissioned by the **National Development and Reform Commission, the Petroleum and Chemical Planning Institute recently organized a technical seminar with experts regarding Datang Company’s coal-to-natural gas project. The experts present mainly reached the following views, considering the project to be feasible and of great significance. First, the project uses abundant and inexpensive lignite as raw material to produce natural gas, resulting in low production costs, substantial profit margins, and strong resilience to price risks ； Secondly, by making use of lignite resources and employing advanced and mature processing technologies to produce coal-to-natural gas, such project development is in line with the **energy development strategy, and it plays a very important role in achieving the clean utilization of coal resources ； Third, Inner Mongolia’s Xilinhot area is rich in coal resources, which can fully meet the project’s annual coal demand of 18.26 million tons ； Fourth, the technology behind this project is safe and reliable, the process and equipment solutions are sound; the majority of the equipment and materials are sourced domestically with only a small amount imported, which helps to reduce costs and accelerate the construction timeline, among other advantages. Experts question the scientific validity and economic viability of the project. Regarding the status of global coal-to-natural gas projects and their economic aspects, a reporter interviewed Dr. Zhang Yuzhuo, vice president of China Shenhua Group. Dr. Zhang said that there is likely only one coal-to-natural gas facility in the world at present, namely the Great Plains Gasification Plant in the United States. The design capacity of its first phase is 3.89 million cubic meters of synthetic natural gas per day (equivalent to 20,000 barrels of crude oil per day). Construction began in 1980, and the plant came online in 1984. The economic viability of building coal-to-natural gas projects in our country has not yet been calculated. But for China, due to the relative scarcity of natural gas, there is definitely a demand that exceeds supply; the key issue is project cost. A senior industry expert who wished to remain anonymous told reporters that there are no technical issues with coal-based SNG production; the plant in the American Great Plains produces SNG from lignite with a high moisture content of 30%, and it has been in operation for 20 years, using LUGRI MARK-Ⅳ reactors. The LUGRIMARK-Ⅳ furnace produces gas with a relatively high methane content, but the treatment of phenol-containing wastewater is quite difficult; this represents a bottleneck issue in China at present. The U.S. Great Plains plant has not been profitable for many years; it was only in recent years, thanks to rising oil prices and other additional products, that things began to improve. In the development of Inner Mongolia, attention should be paid to market research, and considering the co-production of certain chemicals is also necessary. If there are no other by-products or co-products in the natural gas production process, the technical and economic viability of such a production approach is questionable. Moreover, **the construction of the second West-East Gas Pipeline has already begun; the volume of natural gas from the western regions as well as that imported from West Asia is quite large, and the feasibility of producing natural gas from coal is doubtful. The expert said that if other gasification technologies are used, the methane content in the syngas is very low; to produce more methane, a large amount of effective gas (CO+H2) is required. Theoretically, 4000 Nm3 of effective syngas (CO+H2) is needed to produce 1000 Nm3 of methane, and in practice the consumption is even higher ； Storing natural gas is a major challenge; it can only be sent out immediately after production. If it is turned into methanol, it is in a completely different state. Currently, some in the industry have proposed the concept of a \"methanol economy\" as a counterpart to the \"oil economy.\" This is mainly due to the fact that methanol can be easily synthesized, stored, transported, and processed; it can thus serve as a new energy carrier to supply energy for economic and social activities. From this perspective, it would be better for coal-to-natural gas projects to be converted into coal-to-methanol with co-production of natural gas (or city gas), or even simply to coal-to-methanol. At the current domestic natural gas prices, the economic viability of coal-to-natural gas is not good, and it is far inferior to that of methanol. **Progress will be made in a cautious manner, with firms showing firm determination. Regarding Datang Company’s coal-to-natural gas project, a relevant official from the National Development and Reform Commission said that efforts will be made to advance the construction of this project in an active yet careful manner. A responsible official from Datang International said that the coal-to-natural gas project being built in Inner Mongolia will deliver gas to Beijing’s natural gas market via long-distance pipelines, thereby helping to alleviate the pressures related to natural gas supply and peak-demand management in Beijing. Project planning must be in line with **industry planning** and **macro-industrial policies**; it is essential to ensure the success of this project.
Starting from November 1, domestic refined oil prices have increased by 8%, affecting many enterprises as well as the lives of ordinary people; energy is playing an increasingly significant role in the development of the national economy. Regarding how to overcome the constraints posed by oil and gas shortages, experts in coal chemical engineering said in interviews with reporters that coal-based synthetic natural gas (abbreviated as coal-based artificial natural gas) is a viable solution suitable for China’s national conditions, and it serves as a shortcut to addressing the energy crisis. What is coal-to-natural gas? Coal-to-natural gas is produced by gasifying coal to generate syngas, which is then subjected to methanation to create a substitute natural gas (SNG) with a calorific value of over 8000 kcal/m3. The contradiction between supply and demand for natural gas in our country is prominent, and the situation is not optimistic. At the Petrochemical Economy Forum held this year, Song Wucheng, a researcher at the Energy Research Institute of the National Development and Reform Commission, predicted that China’s annual gap in natural gas consumption over the next 20 years will range from 107.5 billion to 176.5 billion cubic meters. Take Shenyang, the city closest to us, as an example: with the rapid development of urban construction, the demand for gas is increasing steadily, and market studies indicate that this gap will reach 500 million cubic meters per year in the next 3-5 years. Experts also said that by 2015, China’s coastal areas planned to build liquefied natural gas facilities with a total capacity of nearly 70 million tons per year. LNG (liquefied natural gas) is influenced not only by resources but also by construction costs, transportation costs, investment, fluctuations in gas prices, and **uncertainty. Therefore, to meet future demand for natural gas, China, while developing domestic natural gas resources and importing a certain amount of LNG, makes use of its abundant coal resources to actively develop coal-based synthetic natural gas. This gas is transported from remote coal-rich areas to national consumption markets via long-distance pipelines, which holds strategic significance in terms of energy security and energy conservation and emission reduction. Coal-to-natural gas technology was experimented with by some foreign companies in the 1970s and 1980s; experimental plants were built in Germany, South Africa, the United States, and Denmark, where they operated for extended periods of time, yielding promising experimental results. In July 1984, the United States built and put into operation the world’s first coal-to-natural gas plant, the Great Plains Gas Plant, which currently produces 3.8 million cubic meters of synthetic natural gas per day. Dalian Institute of Chemical Physics in our country conducted extensive research on the methanation of low-calorific-value gas to produce medium-calorific-value city gas, and 10 plants were built successively; however, they could not survive due to the competition from natural gas at that time. At present, China has engineering projects in areas such as coal-to-methanol, coal-to-dimethyl ether, and coal-to-oil; regrettably, no coal-to-natural gas plants have been built in the country yet. Experts in coal chemical engineering believe that coal-to-natural gas has a clear competitive advantage over other coal-based energy products. Firstly, this is reflected in the simple process flow of coal-to-natural gas, as well as its mature and reliable technology ； Low consumption, low investment. Methane synthesis can be carried out at coal gasification pressures; compared to the production of methanol and dimethyl ether, it eliminates multiple steps, and compared to coal-based synthetic oils, it requires even fewer processing units. Secondly, it has a low investment cost per unit of heat value and the highest overall thermal efficiency. Third, coal-to-natural gas conversion features high conversion and selectivity, with the conversion rates of CO and H2 approaching 100%. Fourth, coal-to-natural gas has a high waste heat utilization rate; the superheated steam generated as a by-product of synthetic natural gas waste heat can be used in the turbine cycle and air compressors of this facility, resulting in good economic benefits. Furthermore, coal-to-natural gas is more environmentally friendly; its wastewater contains no harmful substances and is easy to use, allowing it to be used as boiler feedwater or makeup water for circulating water without any treatment required. In contrast, coal-to-methanol and synthetic oils require advanced treatment of their wastewater. Experts also suggest that producing coal-to-natural gas along with methanol, dimethyl ether, ammonia, and other products yields better economic benefits and enhances resilience to risks. Coal-to-natural gas is the cleanest type of gas for domestic use and as a fuel in industrial processes; it is also an excellent alternative to gasoline for motor vehicles, offering advantages such as high calorific value, good environmental performance, and low cost. After being transformed at the coal-rich pits, it can be transported by pipeline to consumer markets, **reducing transportation costs, easing traffic congestion, and thereby gaining a certain level of market competitiveness.
Find a project, find a reason – it’s probably another land-grabbing campaign
I believe there is a certain market, but I am against launching projects in a hasty and unplanned manner