Analysis of the current status of coal-to-gas production

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In 2009, China produced 83 billion cubic meters of natural gas, resulting in a supply-demand gap of over 4 billion cubic meters, which had to be covered through imports. It is estimated that China’s natural gas deficit will exceed 10 billion cubic meters in 2010. Currently, there are 14 coal-to-natural gas projects under construction in our country; if those already in progress are included as well, the total number approaches 20. For a coal-to-natural gas facility with an annual production capacity of 3 billion cubic meters, if the price per cubic meter of natural gas increases by 0.23 yuan, the company will see an additional revenue of 690 million yuan per year; thus, the prospects for coal-to-natural gas are very promising. In coal chemical projects, coal-to-natural gas can achieve an energy efficiency conversion rate of up to 60%, while having the lowest water consumption per unit of heat value; its heat value is 17.8%-21% higher than the minimum heat value specified by the **natural gas quality standards. Product parameters such as carbon dioxide, hydrogen sulfide, and total sulfur are also above **the standards, which is one of the key reasons why coal-to-natural gas is attracting so much attention. However, coal-to-natural gas projects have high technical barriers; they require ample coal resources and water supply, as well as proper handling of the by-product carbon dioxide. Moreover, a comprehensive natural gas pipeline network must be in place to reach downstream markets. 　Coal-to-natural gas also requires substantial capital and technology as a foundation; currently, 5 billion yuan is needed for every 1 billion cubic meters, and a typical project involving around 40 billion cubic meters demands an investment of 20 billion yuan. If driven solely by short-term investment enthusiasm and the pursuit of profits, it is likely to lead to unregulated development of the industry and may also cause damage to the environment. **The National Development and Reform Commission issued a statement on the 18th, stating that the coal-to-natural gas industry needs to be planned in a rational manner; until clear industrial policies are introduced, projects related to coal-to-natural gas and related facilities will be approved uniformly by the National Development and Reform Commission.