Sinopec to acquire foreign technology in bid to enter coal-to-oil sector
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It is reported that Sinopec, which has long been eager to pursue coal-to-oil projects, has already purchased coal-to-oil technologies and equipment from abroad that are in the pilot stage, with the intention of further developing them in order to acquire independent intellectual property rights or core technologies. Sinopec’s roadmap for entering the coal-to-oil sector has also been initially outlined: it will acquire coal resources indirectly by partnering with domestic coal companies, in order to jointly carry out the industrial production of coal-to-oil technology ； At the same time, the combined implementation of coal-to-oil projects with petroleum refining and petrochemical projects may be a direction to explore in the future. Purchase of pilot-scale technology: Syntroleum Corp., based in Tulsa, Oklahoma, USA, announced on February 20 that it has reached a final agreement with Sinopec Corporation to transfer its F-T synthetic oil technology. The transaction was handled by Sinopec’s subsidiary, Sinopec International Business Company Limited. Under this agreement, Sinopec will also build a pilot plant in China based on the company’s Catusa Demonstration Facility (CDF) and related technologies, in order to jointly advance the demonstration, development, and commercialization of this technology. The two cooperating parties will share together the benefits resulting from the improvements made to this technology in China. In fact, the Katusa demonstration plant is a facility for producing synthetic oil from natural gas at a daily capacity of 70 barrels; it was built with joint investment from Synthetic Oil Company, the U.S. Department of Energy, and Marathon Petroleum. However, under the agreement, the plants and technologies purchased by Sinopec will be used to produce synthetic oil using coal, petroleum coke, petroleum asphalt, naphtha, and related materials as raw materials. Sinopec will reinstall the demonstration unit and conduct trial operations within the specified time frame, and it must operate for a certain period of time ； American Synthetic Oil Company provides the necessary technical support. The two parties will form a committee to carry out research and development together. The ownership of any technical advancements and improvements achieved belongs to the party that carried out the research and development. American Synthetic Oil Company has the right to allow third parties in China to use the technological advancements achieved by Sinopec, provided that such third parties do not have any significant conflicts of interest with Sinopec in their core business activities. The two parties will share the profits from the technology license in a certain proportion and under certain conditions. Industry experts point out that this agreement potentially rules out the possibility of CNPC and CNOOC acquiring this technology in the future once it becomes more mature. It can also be implemented alongside oil refining projects. Experts from Sinopec’s Research Institute of Petroleum Chemistry have confirmed that Sinopec recently acquired, in one go, synthetic oil technology that is already at the pilot stage from an American company. However, the expert emphasized that Sinopec’s goal is to acquire independent intellectual property rights for this technology or gain control over its core technologies, so as to reduce technical costs in the future through methods such as cross-licensing of intellectual property. The source revealed that Sinopec has developed plans for coal-to-oil production, and may adopt a different technological approach compared to other domestic coal-to-oil companies in the future. Recently, Academician Chen Junwu from Luoyang Petrochemical Company of Sinopec Group wrote in the journal \"Coal Chemistry\" that the development direction of the coal liquefaction industry lies in the combined implementation of coal-to-oil projects with oil refining and petrochemical projects, in order to achieve complementary raw materials, optimized product mixtures, and shared utility systems. It is also possible to combine the deep processing of refinery residue oil with direct coal liquefaction for oil production through coal-to-hydrogen processes. Industry experts point out that for the plants and technologies purchased by Sinopec this time, the raw materials include not only coal but also petroleum coke, petroleum asphalt, naphtha, and other refining products; it is likely that efforts are being made in the direction of such \"joint implementation\". Sinopec has been working in partnership with coal companies. During ** this year, Sinopec signed an agreement with ** in Henan Province to collaborate with the local largest coal enterprise, Henan Coal and Chemical Industry Group, on building a coal-to-olefins project. Henan Coal and Chemical Industry Group also plans to start construction on a coal-to-oil project with an annual capacity of 3 million tons by the end of 2010. Sinopec also has a very close relationship with Shenhua Group; it not only may sell the refined products produced by Shenhua’s coal-to-oil plants but is also involved in the refining of the synthetic oils generated by those plants. Su Shulin, chairman of Sinopec, has said he is willing to form a strategic partnership with Shenhua to jointly develop oil substitutes.
Is that really true? Sinopec has also started. . . .
A few years ago, Sinopec already said that if it ventured into coal-to-oil technology, people shouldn’t be surprised. As early as two years ago, Sinopec signed a non-binding memorandum of understanding with this company. This company, which partners with Sinopec, has been working on coal-to-oil technology and conducting pilot tests for many years; it is a company listed on the U.S. stock market and is quite well-known in the Fischer-Tropsch synthesis industry. Given Sinopec’s emphasis on diversity in raw material selection, it is likely that the indirect liquefaction route is being used, which provides greater flexibility in choosing raw materials. Even if Sinopec decides to develop biomass-based oil production in the future, it will only need to make some modifications in the earlier stages of the process. Among those that are good at indirect liquefaction, in addition to Sasol, there is also Shell, as well as Syntroleum. Sasol partners with Ningxia Coal, while Shell partners with Shenhua; thus Sinopec only has this option left. Of course, if Sinopec wishes, it can also opt for technologies developed domestically, such as the indirect liquefaction technology developed by Shaanxi Jinchao (which is currently in the later stages of pilot testing). But after all, it’s Sinopec! Let’s wait and see what further actions will be taken. Sinopec is only now starting to move into technical pilot testing or validation; it seems a bit late. This post was last edited by *aojungnft on 2009-4-6 05:19]
"Academician Chen Junwu from Luoyang Petrochemical Company of Sinopec Group wrote in the journal \"Coal Chemical Engineering\" that the development direction of the coal liquefaction industry lies in the combined implementation of coal-to-oil projects with oil refining and petrochemical projects, in order to achieve complementary raw materials, optimized product mixtures, and shared utility systems. It is also possible to combine the deep processing of refinery residue oil with direct coal liquefaction for oil production through coal-to-hydrogen processes. " In fact, this information also indicates that the deep-processing projects of coal chemical enterprises are gradually shifting towards the petrochemical sector, while some of the technologies used for processing raw materials in the petrochemical industry are also being applied in coal chemistry. The gradual convergence between coal chemistry and petrochemistry is therefore a trend; in the future, there will surely be strong collaborations between the petrochemical and coal chemical industries
Those upstairs may not be aware of the truth: Sinopec has been working on alternative energy sources for many years now. This is due to China’s situation of having a shortage of oil and an abundance of coal; it is becoming increasingly difficult to find oil abroad, and every country regards oil as a strategic resource. It was proposed back at the party group’s strategic planning meeting in 2003, and in 2006 the strategic vision for Sinopec to pursue both petrochemical and coal chemical industries in the future was further clarified. Sinopec has long had plans to replace oil with coal; it has made preparations in terms of technical capabilities, human resources, as well as coal resources. It just doesn’t publicize these plans much, because unlike companies such as Shenhua, Sinopec does not need to advertise its coal-to-oil production activities. As for coal gasification projects carried out in cooperation with companies such as Sinopec and Shell, these are among the earliest of their kind in China. How many people from Sinopec were involved in the operation of Shenhua’s coal-to-oil facility? Sinopec has technical capabilities in various areas of the industry chains involving direct coal-to-oil conversion, indirect coal-to-oil conversion, coal-to-olefins, and coal-to-natural gas, all of which involve complex production processes. After all, in the chemical industry sector, whether it is petrochemicals or coal chemicals, Sinopec in China will not fall behind others. Sinopec has long accumulated large reserves of coal resources in Inner Mongolia and Xinjiang. This post was last edited by shell Gasify job hunting on 2009-4-6 13:57.]
No wonder Shenhua is going all out – it turns out that even Sinopec doesn’t pay it any attention.:)
How does Shenhua operate? It doesn’t seem to have much direct connection with Sinopec, right?
The Tian Tianhe Chuang methanol and dimethyl ether project, a joint venture of four companies including Sinopec and China National Coal Group in Ordos, Inner Mongolia, may represent a major move toward entering the coal chemical industry; this project was specifically mentioned by the National Development and Reform Commission.
It’s good to enter the market during an economic crisis to save costs. Danger turns into opportunity.