How is coal turned into oil

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This post was last edited by jordan569 on 2013-1-6 at 21:41. How is coal turned into oil? 2010-03-26 11:18:05 China Petrochemical News 20100326-07. “Dear passengers, thank you for choosing Cathay Pacific Flight CX748 from Johannesburg to China **! ”The aircraft, powered by aviation kerosene supplied by South African company Sasol, landed slowly at **International Airport, bringing relief and joy to the journalists covering the coal-to-oil project in South Africa. Two years earlier, in April 2008, Sasol was granted permission to produce 100% coal-based aviation fuel; since then, flights departing from Johannesburg have used this coal-based fuel as their power source. This is the concrete manifestation of Saso Company’s business philosophy of “Reaching New Frontiers,” which evolved from being able to produce gasoline and diesel from coal in the 1950s to also being able to produce aviation fuel from coal. Fischer-Tropsch technology: Getting coal to flow. Coal, oil, and natural gas are the three most important fossil fuels in the world today. Since both oil and coal are formed from the deposition of remains of ancient plants and animals, their chemical compositions are very similar, containing elements such as carbon and hydrogen. This led to the idea of extracting oils and chemical products from coal for easier use, giving rise to the coal-to-liquids (CTL) technology. Paul Morgan, fuel technology manager at TotalEnergies’ R&D center, told reporters that the company had also explored direct coal liquefaction, but direct liquefaction requires high-quality coal as raw material, the liquefaction process is complex and difficult to control, and the quality of the products produced is not as pure as that obtained through indirect liquefaction; for these reasons, TotalEnergies decided to stick to the indirect liquefaction method. After more than 50 years of relentless effort, Sasol finally became the world’s first and only energy and chemical company to master the technology for indirect coal liquefaction. Gordon, the manager of Saso’s R&D department, used slides to show journalists the process of converting coal into oil: first, coal is gasified in a gasifier under high temperature and pressure to produce syngas; after impurities such as sulfur are removed, this syngas is fed into a Fischer-Tropsch reactor where it is processed to yield refined oil and chemical products. Sasol has developed high-temperature and low-temperature Fischer-Tropsch processes, with different operating conditions and products for each process. Since 1955, the company has been using a high-temperature Fischer-Tropsch process, with cyclic fluidized bed reactors operating at a pressure of around 25 MPa and temperatures ranging from 330 to 350 degrees Celsius; the end products are gasoline and olefins. The Sasol low-temperature Fischer-Tropsch process initially used fixed-bed reactors, which were later replaced with tubular fixed-bed reactors. The operating temperature of such reactors is typically between 180 degrees Celsius and 250 degrees Celsius, with a pressure range of 10 MPa to 45 MPa; they can produce large quantities of heavy oil products such as diesel, liquefied petroleum gas, and naphtha. Dr. Xu Hailong, Vice President of Sasol Synthetic Fuels International Ltd., explained that similarly, natural gas can be processed through Fischer-Tropsch reactors to produce finished products such as diesel, naphtha, and liquefied petroleum gas. This technology is known as gas-to-liquid or gas synthesis oil (GTL) technology. Currently, only Safran and Shell possess this technology in the world. Gas-to-liquid (GTL) is different from liquefied natural gas (LNG); the latter is converted into a liquid state at low temperatures for ease of transportation, and it must be vaporized again upon arrival at its destination in order to be supplied to users in gaseous form. Fluctuations in oil prices affect the coal industry. Coal-based oil products are essentially similar to those produced by traditional crude oil refineries. Although a company’s cost structure is not related to crude oil, oil price levels indirectly determine the success or failure of the coal-based industry, and this is due to the substitutability of fossil fuels. The core of the coal-to-oil process relies on FTO technology. Research and development on this technology began in 1925, and mass production started in Germany in 1929. During World War II, Germany’s annual production of synthetic oil exceeded 500,000 tons. In the 1920s and 1930s, the UK and the US also engaged in the development of this technology and established pilot plants. However, when new large oil fields were discovered in Texas, Louisiana, and the Middle East, they **lost interest in this technology**. From World War II to the first oil crisis in 1973, there were abundant oil reserves, and Western powers held dominance in the Middle East. They controlled world oil prices by suppressing oil prices in that region, resulting in low world oil prices for a long time. Although the United States continued to conduct FTO research after World War II, particularly through the Synthetic Liquid Fuels Program carried out by the U.S. Bureau of Mines (1944–1985), this technology never progressed from the experimental stage to large-scale production. After the two oil crises, Presidents Nixon and Carter encouraged the large-scale development of the synthetic fuel industry in 1973 and 1980 respectively, in order to reduce the United States’ dependence on oil imports. This project was initiated by a private enterprise and focuses on raw materials such as coal, oil sands, and shale oil. In 1985, Reagan **believed that private companies should bear all the costs**, and therefore he abandoned the entire project. Companies such as Unico and Exxon that are involved in the synthetic oil industry have suffered huge economic losses. In recent years, the situation in the Middle East has remained unstable, and international oil prices have continued to rise. Countries that possess abundant coal resources but lack oil and gas resources **have once again shown interest in coal-to-oil technology**. It seems that South Africa’s decision in 1950 to establish the Sasol Company was indeed far-sighted. Although this move had elements of coercion, as the apartheid regime in South Africa from 1948 to 1990 faced international trade sanctions, it was quite difficult for South Africa to obtain oil from abroad. South Africa **decided at that time to make energy self-sufficiency a top priority, and adopted a long-term strategic decision to formally merge Sasol into a state-owned company in order to develop coal-to-oil projects and enhance its self-sufficiency capabilities.** The first plant site of Chasso, located at Chasso Castle (Chasso Phase 1), was completed in 1954. In 1955, the first gasoline products were launched. The entire capital of 47 million pounds was provided as a subsidy in the form of share capital by **Industrial Development Corporation (IDC)**. In 1958, Chassot decided to establish its own R&D team. By the time Sasol’s employees finally resolved the initial issues with the synthetic oil reactor and brought it to optimal operating conditions, Sasol had a thorough understanding of the basic principles of the FTO process, as well as the methods for commercializing, optimizing, and applying this process and its technologies. After the end of the Fourth Middle East War in October 1973, OPEC set the oil price at $12 per barrel, compared to just $3 per barrel in 1970. Given the good performance of the Fort St. Philip plant, South Africa **decided in 1974 to build a new plant that was 10 times larger than Fort St. Philip plant. This is Phase 2 of Chassau, which was constructed in Saconda in the 1970s. In 1980, Phase 2 of Chasau was completed, at a construction cost of $3.2 billion. In 1979, the Iranian Revolution caused oil prices to reach a peak of $40 per barrel, which led to the **decision to start building the third Sasol plant (Sasol Phase 3). The construction period for Phase 3 of Shaso is two years shorter than that of Phase 2. The two factories began operating at full design capacity almost at the same time. The Chasso Phase 3 was designed to avoid many of the problems encountered during Phase 2 testing. 80% of the funding for Phase 2 and Phase 3 of Shaso came from **loans**. During the “coal to oil” process, Sasol continuously improves existing technologies to optimize the entire product value chain. On some key technologies, Saeso has also successfully partnered with the original technology owners to become joint patent holders. Without **’s strong support, South Africa’s coal-to-oil industry would not be as dynamic as it is today. From 1950 to 1979, South Africa’s petroleum products were mainly imported from the international market, subject to high import taxes, whereas domestically produced coal-to-oil products were exempt from consumption taxes, **in order to support the coal-to-oil industry. In 1979, Sasol was privatized and listed on the Johannesburg Stock Exchange. South Africa **has begun implementing additional protection policies for its domestic industry**, providing a subsidy of 3.6 South African cents per liter for all liquefied petroleum gas, gasoline, diesel, and kerosene produced from local coal, and ensuring that the prices of these products rise in line with increases in international oil prices in the future. In 1989, South Africa **adopted new protection mechanisms, introducing the concept of a floor price; if oil prices fell below the specified minimum level,** subsidies would be provided to Sasol. The average price of coal-to-oil products is 216 dollars per cubic meter; if market prices fall below this level, **protection measures will be implemented. The underlying crude oil price at that time, corresponding to the product benchmark price of $216 per cubic meter, was $23 per barrel. Since crude oil prices are more commonly used and remain transparent when applied on a large scale, Sasol receives subsidies when international oil prices are below $23 per barrel. In 1995, this protection mechanism was reviewed, and it was **recommended to retain the existing mechanism, reducing the floor price from over $20 per barrel to $16 per barrel, with that level to remain in place for 5 years. Since the late 1990s, Chassis has no longer been protected by the floor price mechanism. Today, Sasol has grown into South Africa’s largest industrial enterprise, primarily engaged in integrated oil and gas operations, as well as having a substantial production business in chemical products. In 2008, its turnover was $17.8 billion, with profits of over $3.2 billion, and it employed 34,000 people worldwide. In South Africa, Sasol produces 160,000 barrels of fuel per day (about 8 million tons per year), of which 100,000 barrels are derived from coal and natural gas. Learning from experience: The \"coal\" flowers bloom. In 1994, with the abolition of apartheid and the lifting of international sanctions, Sasol embarked on its long-awaited international expansion journey. As the world’s sole operator of commercial Fischer-Tropsch technology, Sasol began to seek business opportunities outside South Africa. In 2007, Sinopec’s first gas-to-oil project, Oryx, came online in Qatar. In this joint venture, Sinopec held 49% of the shares while Qatar held 51%, with a production capacity of 32,400 barrels per day. The second gas-to-oil project in Nigeria is expected to come online in 2011; the joint venture between Total and Chevron Texaco is projected to produce 32,400 barrels per day, with Total holding a 10% stake, Chevron holding a 65% stake, and the remaining 25% belonging to Nigerian oil owners. Sasol has made a significant contribution to the South African economy: it provides direct and indirect employment for 198,000 people in South Africa, accounting for 2.2% of the country’s formal workforce; it generates $8.6 billion in economic output, which represents 4.7% of South Africa’s GDP; it saves $2.4 billion in foreign exchange reserves each year; its coal production accounts for 18% of the country’s marketable coal output; and it pays $1 billion in taxes to South Africa. As South Africa’s largest investor, Shaso Capital invested $10.6 billion between 2003 and 2007, and added another $7 billion in investments from 2008 to 2010. Li Sitao, General Manager of Sinopec, said in an interview with reporters: “We are convinced that Sinopec’s successful transformation of South Africa’s energy landscape can be replicated anywhere in the world, especially in China.” ” In December 2009, the application report for the Ningxia-Shasu coal-to-oil project was submitted to China**. This ambitious project is a collaboration between China Shenhua Group and Sasol, with a total investment of over 8 billion US dollars; it is considered one of the most significant investment projects in Chinese history. Its coal-to-oil production capacity is roughly equivalent to the combined production capacity of all of Sasol’s coal-to-oil plants in South Africa. This project will consist of three joint ventures, namely the coal-to-oil joint venture, which will have a coal-to-oil production plant with a daily output of 90,000 barrels (equivalent to over 4 million tons per year), the coal mine joint venture, and the catalyst joint venture. Investment ratios in the three joint ventures: For the coal-to-oil joint venture, Shenhua and Sasol each hold 50% of the shares ； Coal mining joint venture, with Shenhua holding 51% and Sasco holding 49% ； The catalyst joint venture is held 30% by the Chinese party, while Sasol and another foreign company each hold 35%. The project utilizes a low-temperature Fischer-Tropsch process, with commissioning expected in 2016; at that time, 75% of the products produced will be diesel, while the remainder will be naphtha and liquefied petroleum gas. Li Sitao told reporters with confidence, \"The feasibility study for this project indicates that an internal rate of return of 13% can still be achieved when international oil prices are at $86 per barrel. If further optimizations are made during the implementation of the project, an internal rate of return of 15% or even higher could be attained.\" If, after repaying the loans and interest on this project, it only needs to cover its daily operations, it will be able to avoid losses even if international oil prices remain around $40 per barrel. ” Shaso believes that a win-win situation can be achieved in partnership with strategic allies, for the following reasons: China possesses abundant coal resources; it has a need for energy security and self-sufficiency, a demand for clean energy, and a desire to diversify the value of its resources. Casson cited materials from the Investment Research Institute of China’s National Development and Reform Commission, stating that when evaluating the direct and indirect impacts of coal-to-oil plants over a 25-year operation period, during the 5.5-year construction phase, a coal-to-oil project with an annual production capacity of 3 million tons would create 37,000 jobs per year at its peak, generate 2 billion yuan in additional fiscal revenue, bring in nearly $2 billion in net capital inflows to China, and contribute 47 billion yuan to economic growth. During the first 25 years of the factory’s operation, this project will create 15,000 jobs per year, increase fiscal revenue by 72 billion yuan, save 36 billion US dollars in foreign exchange costs, and contribute 226 billion yuan to economic growth. Li Sitao said, “We are not selling technology; in China, we are partners who invest 50%. This is very important, and we will surely do our utmost to bring in the most advanced processes and technologies.” ” The coal-to-oil process utilizes clean coal technology: it uses low-quality coal as input to produce high-quality oil products. The sulfur contained in coal is removed during the syngas purification stage; it can be sold as an additional product, generating extra revenue. Coal-derived diesel features cleanliness and rapid biodegradability, meeting Euro 5 or ultra-Euro 5 standards. It contains almost no sulfur or aromatic hydrocarbons, and has a high cetane number, which facilitates cold starting and operation at low temperatures. This helps in using catalytic exhaust after-treatment systems. Coal-based diesel can be used in diesel engines, providing a fuel platform in China for the use of the latest engines. It can also **reduce emissions and make urban environments cleaner, which is one of China’s current priorities**. “It is a clean energy source; it does not produce traditional black smoke when burned. ”Li Sitao said. When discussing environmental protection issues, Li Sitao said that carbon dioxide emissions are not only a problem faced by China but also a global issue. The advantage of the FTO coal-to-oil technology over thermal power generation is that, compared to conventional thermal power generation, the carbon dioxide produced as a result of the FTO process is of high purity. Carbon dioxide with a purity of 98% can be used for sequestration or oil displacement. I hope to carry out cooperation on using carbon dioxide for oil displacement with companies such as CNPC and Sinopec. If carbon dioxide sequestration is carried out, the cost of collecting carbon dioxide is only 20% of the cost involved in collecting it from thermal power generation. The cost of capturing 1 ton of carbon dioxide in thermal power generation is $100 to $150, while it is around $20 using the Sasol process. Saeso set goals for itself: a 20% reduction in carbon dioxide emissions by 2020 compared to 2005, and a 30% reduction by 2030 compared to 2005. “Thanks to Sasol’s continuous improvements and optimizations in its production processes, the Secunda plant in South Africa currently requires 10 to 12 tons of water to produce 1 ton of oil, but the project in China should be able to produce 1 ton of oil with only 8 tons of water. ”Li Sitao admitted frankly. Recently, the environmental impact assessment report for this project passed the technical review by the Environmental Engineering Assessment Center of China’s Ministry of Environmental Protection. I look forward to Shaso continuing to make unremitting efforts in China to help the \"coal\" industry flourish. Source: Sinopec News Network (http://10.10.250.200/), related articles. Note: $ # $ $