Coal-to-oil projects will be put into operation in large numbers in 2009

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This post was last edited by jordan569 on 2013-1-6 at 22:44. Despite the sharp drop in international crude oil prices, the coal-to-oil projects of Shenhua and Lu’an began producing oil in 2008, and there are no signs that other such projects will be halted. Industry analysts believe that although low oil prices in the short term result in limited profitability for coal-to-oil production, in the long run, relevant plans and policies will be introduced to encourage the development of the coal-to-oil and coal chemical industries, thereby ensuring China’s energy security strategy. The 1 million tons per year direct liquefaction coal-to-oil project of Shenhua Group’s Coal-to-Oil Chemicals Company in Ordos has been in operation since December 31, 2008, producing qualified oil products and chemical substances; further adjustments will be made to ensure stable operation over long periods of time. According to Yaha Consulting’s forecasts, the 160,000 tons per year iron-based slurry-bed indirect liquefaction coal-to-oil projects built by Lu’an, Yitai, and Shenhua, utilizing the technology from the Shanxi Institute of Coal Chemistry under the Chinese Academy of Sciences, will all come online in the first half of 2009. The indirect coal-to-oil project, a 50-50 joint venture between Shenhua Group based in Ningxia and Sasol, is currently undergoing the second phase of feasibility studies, with construction set to begin by the end of 2009. In addition, the 1 million tons per year indirect coal-to-oil project in Yulin, Shaanxi, which relies on Yankuang Group’s own intellectual property, is also under development. On December 11, 2008, the Ministry of Environmental Protection gave its approval in principle to the environmental impact assessment for this project. Industry experts say that, given the current economic slowdown and low levels of international oil prices, the aforementioned projects may not be economically viable. It is understood that, generally speaking, coal-to-oil production is economically viable when crude oil prices are above $40 per barrel. However, with international oil prices remaining low at present, the attitude toward coal-to-oil projects is uncertain, leaving the ongoing such projects in a rather awkward situation. However, data from Yahuazheng Consulting show that in terms of efficiency, direct coal liquefaction is currently the most effective method for producing liquid products from coal. Although international crude oil prices are currently low and the project does not show significant economic benefits at present, its economic viability will improve as oil prices rise. A source from Shenhua Group told reporters that **although the large-scale development of coal-to-oil projects is restricted in the short term, the importance of coal-to-oil technology as a technical reserve is self-evident. As for the current low oil prices, this person believes that they are only temporary, and the economic benefits of coal-to-oil production will become apparent as oil prices rise again. Recently, international crude oil prices have gradually risen to around $48 per ton. Experts from AsiaChem Consulting believe that as industrial demonstration projects for coal-to-oil conversion are successfully brought online and the relevant industrial technologies are proven effective, and meanwhile with economic recovery and rising international oil prices ensuring the economic viability of coal-to-oil conversion, **relevant plans and policies will be introduced to encourage the development of the coal-to-oil and coal chemical industries, thereby safeguarding China’s energy security strategy. . Note $ # , $ $