Overview of the Coal Chemical Industry Plan for Shuicheng, Guizhou

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I. Planning for the Water City 1. Planning scheme for chemical projects: The plan calls for the construction of facilities capable of producing 200,000 tons per year of methanol and 150,000 tons per year of dimethyl ether at Eagle Mountain by 2010; by 2015, the production capacity is to reach 400,000 tons per year of methanol and 300,000 tons per year of dimethyl ether. The raw coal demand for Phase 1 is 330,000 tons, while the combined raw coal demand for Phases 1 and 2 is 880,000 tons. The chemical utilization project is an important part of the integrated coal, electricity, and chemicals development in Eagle Mountain; it enables the conversion of local coal resources into economic assets, thereby promoting regional economic development. The plan starts with a dimethyl ether project with an output of 150,000 tons per year, which is well suited to the local resources and market conditions, and the choice of product variety and scale is reasonable. Dimethyl ether, as a clean fuel derived from coal, has seen rapid development in recent years and is currently mainly used to replace liquefied gas as a fuel for household use. Domestic companies such as SNOW and Jutai have made significant efforts in developing the market for dimethyl ether as a civilian fuel, achieving considerable success; they have also begun constructing dimethyl ether production facilities with capacities of millions of tons in markets such as Zhangjiagang and Guangdong. A market for dimethyl ether as a civilian fuel has already emerged. Good progress has also been made in using dimethyl ether as a clean fuel for vehicles. In September 2007, the Shanghai Municipal Commission of Economy and Trade conducted an evaluation of the project aimed at developing dimethyl ether-based clean fuel vehicles through industry-university-research collaboration in Shanghai. To date, dimethyl ether engine systems as well as complete vehicle prototypes have been developed; two dimethyl ether vehicles are currently being tested on bus routes. This year, 10 such vehicles are scheduled to be put into trial operation on bus routes, with the goal of promoting the use of dimethyl ether-based clean fuel vehicles by the time of the 2008 Shanghai World Expo. Many experts believe that promoting dimethyl ether as a fuel for vehicles in China is well suited to the country’s situation of diesel shortage. Driven by the shortage of petroleum products and high oil prices in China, dimethyl ether also holds potential as an alternative fuel for vehicles. The oil products and liquefied gas in Guizhou province rely entirely on supplies from outside the province. By taking advantage of the region’s coal resources, it will be possible to ensure a supply of fuel for domestic use, and the development of dimethyl ether as a clean fuel is feasible. It is recommended to arrange the construction of civilian gas distribution outlets and transmission systems at an early stage, simultaneously with the development of the dimethyl ether project. The technical plan for the dimethyl ether project includes water-coal slurry gasification, sulfur-resistant shift reaction, low-temperature methanol washing for purification, low-pressure synthesis, and four-column distillation; this technical plan is reasonable. It is crucial to ensure an adequate supply of coal that meets the quality requirements for slurry gasification, as well as the appropriate methods of transportation, in order to guarantee the economic viability of the project. 2. Rational layout: The site for the dimethyl ether project is located in Shihe, Eagle Mountain Town, 400 meters away from the Eagle Mountain coal washing plant. It is near the Nei-Kun and Gui-Kun railways, ensuring convenient transportation. The water supply will come from Yuyuan Water Plant, the reclaimed water from sewage treatment plants, and mine water. Yuyuan Water Plant can supply 8-10 million M3 per year to the coal, chemical, and power integration complex. It is necessary to further clarify the situation of water plant users, including the current water usage by these users as well as those in the coal, chemical, and power integration projects, to ensure a proper balance in water usage at the water plants and to guarantee a stable supply of water. It is recommended that the utilization of the three types of waste from the dimethyl ether project be incorporated into the overall balance of the comprehensive utilization plan. 3. Recommendations on the utilization of coalbed methane: The plan proposes to construct 16 coalbed methane power generation units, each with a capacity of 700 MW, at various coal mines, based on their respective capabilities for gas extraction. Given the current technical conditions and the requirements for coalbed methane extraction, power generation is the most practical utilization option. The main component of coalbed methane is methane, which makes it an appropriate raw material for methanol production. The production process is simple, the investment required is low, and the utilization rate of the raw material is high. It is recommended that, under conditions of further increased coalbed methane extraction and considerable concentration, the possibility of producing methanol from coalbed methane in nearby mines be explored. II. Panjiang Plan 1. Planning Scheme The overall plan for Panjiang Coal Chemical Industry is to produce 1.2 million tons per year of dimethyl ether, with an accompanying capacity of 1.8 million tons per year for methanol. The first phase will involve the construction of a facility capable of producing 400,000 tons per year of dimethyl ether and 300,000 tons per year of methanol. For the first phase of the project, the planned capacity is 960,000 tons per year for raw coal and 520,000 tons per year for fuel coal. In total, for both phases combined, the demand will be 2.88 million tons per year for raw coal and 1.44 million tons per year for fuel coal. The raw coal mainly relies on the high-sulfur coal produced by the planned Xiangshui coalfield and the existing six mines. The total planned production capacity of the Xiangshui Coal Mine area is 10 million tons per year; four mines will be constructed to supply 3 million tons per year of coal for use in the coal chemical industry. High-sulfur coal produced by the various mines within the area is intended to be utilized, with separate extraction and transportation processes carried out underground. The Panjiang mining area currently has six pairs of mines, with a production capacity of 9.43 million tons; after the exploitation of high-sulfur coal, this capacity will rise to 15 million tons. Most of the additional production capacity relates to high-sulfur coal, and the 5.57 million tons of additional coal can be used as another source of coal for the dimethyl ether project. Planning coal chemical projects mainly involves using local high-sulfur coal. Reasonable approaches to chemically converting high-sulfur coal can reduce its environmental impact and find solutions for selling such coal. Therefore, the project selection meets the requirements of **industrial policy. The report indicates that the ash fusion temperature of the coal from the Panjiang mining area is 1090–1450°C; therefore, large-scale water-coal slurry gasification furnaces can be used. These furnaces feature advanced technology and are well-established in practice. It has created favorable conditions for the construction of large-scale coal chemical projects in the Panjiang area. Given that the dimethyl ether project at Eagle Mountain in Shuicheng is primarily aimed at the local market, the target market for the large-scale dimethyl ether project in Panjiang is, in addition to developing the local domestic dimethyl ether market, mainly the South China market. South China is the region in China where the most liquefied gas is imported. The local market for domestic fuel has high demand, and consumers there have a relatively high tolerance for prices. In 2006, China’s production of liquefied gas was 16.5 million tons, imports amounted to 6.3 million tons, while the apparent consumption was 22.7 million tons. Of this, 4.55 million tons of liquefied gas were imported into South China. Therefore, South China has a large dimethyl ether market. The overall approach of recommending that large-scale dimethyl ether plants supply the South China market is reasonable. It is recommended to study storage and transportation solutions for the South China market. Meanwhile, in the feasibility study of the next chemical project, South China should be considered as a target market for such studies, and a competitive analysis should be conducted with imported LPG and LNG in that region. 2. Planning and layout: The site for the dimethyl ether project has been preliminarily selected on the high ground to the east of Lufan Railway Station, along the Weishie-Hongguo section of the Nan-Kun Railway. The raw material coal is collected in the Panjiang mining area and transported by train to the Pannan Coal Chemical Industry Base. The water source comes from Mulong Reservoir and the proposed reservoir on the Shiqiao River. The Mulong Reservoir is located 12 KM away from the plant site, with an effective storage capacity of 4.647 million M3. The Shiqiaohe Reservoir, which is to be constructed, has a maximum storage capacity of 5.4 million M3. Coal chemical industries consume a large amount of water, so ensuring an adequate supply of water resources is of great importance. It is recommended to carry out further water resource assessments, implement the construction plan for the Shiqiao River Reservoir, and determine the scale of the dimethyl ether project based on reliable water supply capabilities. It is recommended to include the resource utilization of the three types of waste from chemical projects as well as the use of by-products in this plan for comprehensive consideration.