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Author/Source: http://www.chemall.com.cn/ Date: 2009-4-9 -------------------------------------------------------------------------------- In March 2009, ** in Henan Province signed a framework agreement with Sinopec Group for the cooperative development of modern coal chemical industry. Under the cooperation agreement between the two parties, Henan Province **designated Henan Coal and Chemical Industry Group to work together with Sinopec to build a modern coal chemical project in northern Henan that integrates coal mining and coal chemical processing. Sinopec is also interested in developing coal chemical projects in Xinjiang. In 2007, Sinopec registered a 350-square-kilometer coal block in the Junggar Basin in Xinjiang, with estimated reserves of around 15 billion tons; this area is intended to be used for Sinopec’s future coal chemical operations. Sinopec plans to invest around 50 billion yuan in this project. A representative from Sinopec’s New Energy Office said that the area is still in the stage of preliminary surveys at present, with the official development of coal chemical industries expected to begin in 2015. According to Yaha Consulting, Sinopec has carried out extensive technical development work in the field of coal chemicals. In terms of coal-to-oil conversion, Sinopec’s 10-ton/day F-T synthetic oil pilot plant located at Zhenhai Refining & Chemical in Zhejiang was put into operation in 2007; a million-ton-scale coal-to-oil process package is currently being developed on this basis. In the field of coal-based olefins, Sinopec conducted industrial-scale experiments on methanol-to-olefins (SMTO) production at Yanshan Petrochemical, with the facility coming online in November 2007. The ethylene and propylene produced were sent directly to the existing plants at Yanshan Petrochemical for further processing, enabling continuous operation. The device uses a fluidized-bed reactor and employs the SAPO-34 molecular sieve catalyst provided by the Shanghai Petrochemical Research Institute. In terms of coal gasification technology, the ‘single-nozzle cold-wall pressurized coal gasification technology’ process package, jointly developed by Sinopec Ningbo Engineering Company and East China University of Science and Technology, was contracted in August 2008 for use in the 300,000 tons per year methanol project at Tianye in Inner Mongolia. In terms of methanol synthesis technology, the C307 medium-low pressure methanol synthesis catalyst developed by the South Chemical Research Institute of Sinopec has been used in 22 manufacturing facilities, including Henan Lan Tian Group’s 300,000 tons per year methanol plant; the total annual production capacity of these facilities is 3.19 million tons per year. Yahua Consulting believes that as China’s largest petrochemical company, Sinopec will pursue a distinctive path as it enters the coal chemical industry. Academician Chen Junwu from Luoyang Petrochemical Company of Sinopec once wrote 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. Yahua Consulting predicts that in the future, the raw materials for Sinopec’s coal chemical industry will not be limited to coal alone, but will also include petroleum coke, petroleum asphalt, naphtha, and other refining products; it is likely that Sinopec is attempting to move in the direction of such ‘combined utilization’. Xinjiang possesses abundant oil resources as well as rich coal resources, which will facilitate the joint implementation of Sinopec’s coal-to-oil and petroleum refining projects. 'The 4th China International Forum on Coal-to-Oil, Coal Chemicals and Coal Power 2009 will be held in Urumqi, Xinjiang from June 16 to 18, 2009, to discuss the impact of the international economic environment on the coal chemicals industry, **policy trends, the progress of industrialization projects in coal power, coal-to-oil, and coal chemicals, the development of coal-based synthetic natural gas, as well as investment trends and future market prospects. Finally, 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 expressed a desire to form a strategic partnership with Shenhua to jointly develop oil alternatives.