How is the operation of Shenhua’s coal-to-olefins plant going?

The Shenhua coal-to-olefins project is under construction in Baotou City, Inner Mongolia, but it’s not clear what the current progress is!

I have compiled some information on the engineering, technology, and project details of Shenhua Group to share with my peers for their reference. Shenhua Group Projects: I. The preparatory work for the Shenhua Baotou coal chemical project is progressing smoothly. Located in Baotou, the Shenhua coal chemical project offers a new chemical manufacturing route for China to alleviate oil shortages and ensure energy security. It will provide significant impetus for extending the coal industry chain, adjusting the structure of industrial products, and enhancing the sustainable development capacity of Baotou and the entire autonomous region. The total investment in this project is over 12.4 billion yuan. It is estimated that once the project is completed and put into operation, it will generate annual sales revenue of over 7 billion yuan, after-tax profits of over 1.1 billion yuan, and tax payments of over 100 million yuan. All tasks related to the project, such as company registration, selection of the office building location, and construction design, have been fully launched in accordance with the scheduled timeline and are progressing smoothly. II. In August 2004, Shenhua Group’s industrial direct liquefaction plant for coal-to-oil production was put into operation in Ordos City, Inner Mongolia Autonomous Region. This marked the first time that coal-to-oil production in China moved from laboratory-scale facilities to actual industrial production. The total capacity of this project is 5 million tons of oil products per year, with construction carried out in two phases. Phase 1 has a capacity of 3.2 million tons of oil products per year and consists of three main production lines, including 14 key production units such as coal liquefaction, coal-to-hydrogen, solvent hydrogenation, hydrocracking, and catalyst preparation. The total investment for the first phase is 24.5 billion yuan. Once it is put into operation, it will consume 9.7 million tons of coal per year, and be able to produce 3.2 million tons of various petroleum products, including 500,000 tons of gasoline, 2.15 million tons of diesel, 310,000 tons of liquefied gas, and 240,000 tons of benzene and mixed xylene. To effectively avoid and reduce risks, the project adopted a phased implementation approach: first, a production line with an annual capacity of 1.08 million tons was built, and after the facility began operating smoothly, additional production lines were constructed. The first production line was completed in 2007, while two production lines were finished around 2010. III. Shenhua Group’s entry into the coal chemical industry in Xinjiang: At present, the Xinjiang Uygur Autonomous Region has adopted a development strategy that involves making use of coal resources to promote the construction of large-scale mining areas and coal power plants, accelerating the integration of Xinjiang’s power grid with those in the northwest region, and developing integrated projects such as those involving coal-to-electricity-aluminum, coal-to-electricity-copper, coal chemicals, and coal-to-oil processes. In April 2005, Shenhua Group signed a framework agreement with the People’s Government of the Xinjiang Uyghur Autonomous Region for the development of coal resources in Xinjiang, and thus Shenhua Group entered the field of coal chemical industry in Xinjiang. To support Shenhua Group’s project development in Xinjiang and to coordinate the resolution of issues that arise during construction, the Xinjiang Uyghur Autonomous Region has established a dedicated project leadership team, which will provide preferential treatment in terms of land, resources, and other related policies. In terms of Shenhua’s technology: First, China has currently mastered relatively mature direct coal liquefaction technology. On the basis of a thorough comparison of domestic and international coal direct liquefaction technologies, Shenhua Group has adopted the strengths of various approaches along with mature unit process technologies to develop its own coal liquefaction process routes and catalyst synthesis techniques. Based on an anhydrous, ash-free coal, the oil yield for fractions above C4 ranges from 57% to 58%; the increase in the heavy fractions of the oil is more conducive to the production of diesel products. The catalyst exhibits very high activity. The 863 catalyst preparation facility at the Beijing Coal Chemical Engineering Research Institute, part of the China National Coal Science and Technology Group Corporation, features a simple production process, stable operation, and low costs (one-third to one-sixth of those of foreign catalysts). In September 2004, a facility for the development of direct coal liquefaction processes was built in Shanghai, to support future scale-up efforts and the optimization of industrial plant operations. II. On the basis of developing the \"new process for direct liquefaction of Shenhua coal,\" a process test facility was built. Between October and December 2004, tests were conducted on solvent hydrogenation, continuous operation with hot oil, and 23-hour feed operation, thereby establishing the liquefaction process and achieving the desired development results. Basic research and process development for a new CDCL direct liquefaction process suitable for Chinese coal types and qualities have already been initiated. III. In terms of direct liquefaction catalysts, the Beijing Coal Chemical Engineering Research Institute under the China Coal Research Institute has established a continuous production line for highly dispersed catalysts; nano-scale catalyst products were successfully produced, and coal direct liquefaction experiments were carried out using a 100 kg/d continuous test facility. The results show that, compared with conventional ultra-fine ground natural mineral catalysts, using only about 3/4 of this catalyst amount can increase the yield of liquefied oil by approximately 4% (on a dry coal basis). In terms of the liquefaction process, based on the technical route optimization studies conducted for Shenhua Group’s 1 million tons per year coal direct liquefaction demonstration project, a new coal direct liquefaction process has been developed. The PDU test facility, capable of processing 6 tons of coal per day and currently under construction, will be used to further develop and validate this process, serving as the technical foundation for China’s first industrial demonstration line for coal direct liquefaction. Project: 1. Shenhua Group, **Kerry Chemical Co., Ltd., and Baotou Tomorrow Technology Co., Ltd. are jointly investing in an 1.8 million tons per year methanol project in Inner Mongolia. 2. The coal field in eastern Junggar, Xinjiang, has become the area chosen by Shenhua Group to build a power plant with a capacity of 3 million kilowatts and facilities for producing over 10 million tons of petroleum products per year. Xinjiang holds 35% of China’s coal resources, and it is currently making active efforts to develop large-scale mining areas and coal-fired power bases, with the aim of achieving further progress in integrated projects involving coal, electricity, oil, and other related sectors. Shenhua Group’s decision to build a large-scale coal-to-oil facility in Xinjiang has received significant attention from the region; the autonomous region established a high-level team specifically to support Shenhua Group’s construction project. 3. Shenhua Group and Ningxia Coal Industry Group have made progress in the preliminary research phase for building commercial indirect liquefaction plants capable of producing 3.2 million tons of products per year. Both projects plan to rely on advanced large-scale synthetic oil technologies imported from abroad, with the main products being engine fuel oils and substitutes for petrochemical products. Currently, both projects are in the preparatory stage of technical and commercial negotiations prior to construction, with completion of the project construction expected between 2008 and 2010. 4. The plan to convert coal into gasoline and diesel is being vigorously implemented by China’s two most powerful coal companies – Shenhua Group and Yankuang Group. Shenhua’s project in Ordos started construction in August 2005, with operations set to begin in 2007 ； The pilot study project on coal-to-oil conversion using Yankuang coal passed the expert review at the end of January 2006, and applications are now being submitted for its industrial implementation. 5. Dow Chemical established its third global Dow Center in Zhangjiang, Shanghai ； Planning to invest in a new chemical project in Zhangjiagang ； The coal-to-olefins project with Shenhua Energy is expected to enter the feasibility study phase. Dow Chemical is working together with Shenhua Group on the coal-to-olefins project (\"coal to oil\"). To address the technical challenges that may arise in large-scale coal chemical projects, particularly those related to the methanol-to-olefins (MTO) process, in August 2005, the National Development and Reform Commission and Dow Chemical jointly organized a technical exchange meeting on coal chemicals in Beidaihe. The company and Shenhua Group spent six months to a year to advance the project from the pre-feasibility study stage to the feasibility study stage.

The Baotou coal-to-olefins project is under construction; the civil work is expected to be completed by April this year, with completion anticipated by the end of May 2010

The construction of the methanol center is almost complete! It is estimated that the payment will be made by the end of this year.

The detailed design of the MTO unit has been completed, the main equipment has been installed, and commissioning is scheduled for next year.

Has the time for driving again been set?

The Baotou coal-to-olefins project is under construction; the civil work is expected to be completed by April this year, with completion anticipated by the end of May 2010. Commissioning is likely to take place in October 2010.

Shenhua Group recently conducted a comprehensive quality and safety inspection of the Shenhua Baotou coal-to-olefins project

The entire project is progressing smoothly: the thermoelectric plant is already operating one 480 T/D boiler, and two more are set to be put into operation before the end of the year； Four air compression units with a total capacity of 240,000 cubic meters in the air separation plant are currently under purging; turbine tests and unit integration tests will be carried out before the New Year ； All mechanical work for the methanol plant was completed before the New Year, while the sulfur plant was completed in November ； The large components of the core unit, namely the MTO reactor, regenerator, and three-spin separator, have been lifted into place; installation of the internal components has now begun. Delivery is scheduled for mid-May next year, with the unit set to start operating in June of the same year, at which time methanol will begin to be produced ； In October, the olefins complex produced 300,000 tons of polyethylene and 300,000 tons of polypropylene.

I am concerned about the prospects of the Shenhua project