There are some bad news regarding ammonia production using gas as a feedstock; I’d like to hear everyone’s opinions
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According to Sinochem New Network, following the introduction of new natural gas price policies in Sichuan Province, Chongqing, Yunnan, and Guizhou will also adjust their gas prices. This move has had an adverse impact on the production and operations of chemical and fertilizer enterprises in the southwestern region. “If the price adjustment plan is implemented on a wide scale, in addition to the companies affiliated with CNPC and Sinopec, gas-based chemical and fertilizer manufacturers in the southwestern region will face the risk of heavy losses or even having to shut down. ”Over the past few days, several chemical and fertilizer companies have expressed their concerns to CCIN reporters. According to investigations by CCIN reporters, the concern among these enterprises stems from a notice issued by the Sichuan Provincial Development and Reform Commission. On June 16, the Sichuan Provincial Development and Reform Commission issued a notice titled \"Notice on Determining the Sales Price of Purchased Natural Gas by CNPC’s Southwest Oil and Gas Field Branch and Related Issues,\" approving CNPC’s request to apply a \"separate pricing mechanism and targeted sales\" approach for the purchased gas. The specific pricing mechanism is as follows: starting from June 1, all new gas supplies for industrial use and fertilizer production will be billed at the price of purchased gas ； For existing customers in the fertilizer and chemical industries, the gas consumption within the annual planned range is allocated based on the planned gas usage for 2010, with 16% of that amount being covered by purchased gas ； The gas consumption under the over-year plan is entirely billed at the price of purchased gas. Following Sichuan, relevant departments in Chongqing, Yunnan, and Guizhou, as well as the gas supply providers, have recently held discussions with enterprises to adjust natural gas prices in line with the approach adopted in Sichuan. CNPC Chongqing Gas Mine even required downstream industrial users to pay an advance payment for gas purchases in September, based on the approved proportion of gas purchased from external suppliers and at a price of 2.52 yuan per cubic meter (2.35 + 0.17 yuan per cubic meter for pipeline transportation fees). A furious executive from a fertilizer company did some calculations for a CCIN reporter: after the new gas price policy was implemented, a fertilizer plant with an annual production capacity of 300,000 tons of ammonia and 520,000 tons of urea would incur an additional cost of 100 million yuan per year. It is reported that currently, the price of gas used for fertilizer production in the southwest region is between 0.92 and 1.29 yuan per cubic meter, while the price of gas used for industrial purposes such as methanol is 1.9 yuan per cubic meter (the price for direct supply is 1.7 yuan per cubic meter). Once the new natural gas pricing policy is fully implemented, the total cost per ton of urea will exceed 2,200 yuan, while the total cost per ton of methanol will exceed 3,200 yuan. It is understood that the southwestern region currently has a urea production capacity of 11 million tons based on gas, and a methanol production capacity of 2.5 million tons based on gas. Including the gas demand of other chemical manufacturers, the annual total gas demand is 9.5 billion cubic meters, yet the actual amount of gas supplied is only 6 billion cubic meters. The severe shortage of natural gas has led to a decline in performance for large enterprises that rely on gas for their operations, such as Yuntianhua, Chitianhua, and Jiantao Chemical. From January to July this year, Sichuan Chemical Holding Group’s actual gas supply volume dropped by 200 million cubic meters compared with the same period last year, forcing it to operate only 2 out of its 6 ammonia synthesis plants with a combined annual production capacity of 1.6 million tons at a low load of 70%–80%; meanwhile, the plant with an annual production capacity of 400,000 tons of methanol was shut down for an extended period. The project of Chongqing Jianfeng Chemical Co., Ltd., with a total investment of 3 billion yuan, designed to produce 450,000 tons of synthetic ammonia and 800,000 tons of urea per year, has remained shut down since its completion in August 2010 due to a lack of available gas. This is bad news for ammonia production using gas. Leaders and experts, what are your thoughts after reading this information? Thank you for your suggestions
In fact, if we think things from that perspective, it is only by raising the cost of raw materials that industrial renewal can be promoted and new technologies can emerge. As for who earns more or which stages of the process are most active, within **, not much needs to be considered – as long as everything stays within the framework established. Moreover, this regulation won’t be implemented all at once; it will be introduced gradually. One thing is certain, however: industries that are energy-intensive, low-tech, and highly polluting will face increasingly difficult conditions
This post was last edited by 654262293 on 2011-8-31 at 14:40. This is mainly related to China’s energy structure. As is well known, China has an abundance of coal but little oil and scarce natural gas. The country needs to import large amounts of oil and natural gas from abroad each year, while exporting large quantities of coal. Meanwhile, some enterprises in China that produce synthetic ammonia and methanol use natural gas as a raw material, which is an extremely unreasonable approach. Therefore, new large-scale coal chemical projects use coal as their raw material, and those enterprises that previously used residue oil and natural gas as raw materials for producing synthetic ammonia and methanol are undergoing reforms. In the long run, this is in line with **interests**, and it represents a unified plan for the rational use of energy. Therefore, companies that use pneumatic heads will find it very difficult to survive without making modifications!
In the long run, this is inevitable. Especially since **coal chemical industry is being developed vigorously; relatively speaking, centralized treatment of emissions from the coal chemical industry is better than allowing direct emission of gases during individual consumption, as emissions can be treated in a centralized manner. Natural gas, on the other hand, is quite expensive, and using it for fertilizer production does not yield very high added value at present. Moreover, demand for natural gas for domestic use is increasing continuously**, so it is necessary to pay attention to people’s livelihoods, with domestic needs taking priority.
Using natural gas to produce urea is unreasonable; its elimination is inevitable, but it’s good news for the urea industry! Such a large scale of capacity reduction is a huge advantage! It’s a huge boon for the coal-based fertilizer plants in the southwestern region! There must be someone to fill the vacant market space. There are shipping costs involved in transporting urea from northern regions such as Shandong, Henan, and Shanxi; local companies can engage in price wars – it’s sufficient for them to earn just the cost of shipping!
This post was last edited by shfuchenko on 2011-8-31 at 13:20. Reading everyone’s replies, I have mixed feelings, as our facility uses natural gas as a raw material, and we are also facing shortages of this gas. I remember when we first arrived at the company, we were operating at full capacity; there wasn’t enough gas to meet our needs, which made us wish we could carry out major repairs or find ways to reduce the time required for such repairs. Then, as time passed and three years went by, we faced a shortage of gas. The gas used by the auxiliary boilers was modified, and the management stated that major repairs would begin as soon as the gas supply was exhausted this year. **From a policy perspective, using natural gas to produce urea is indeed a waste of resources. Natural gas is an energy source that is easy to transport and relatively clean; however, using it to manufacture fertilizers results in high energy consumption, low added value. The production process also involves significant use of water and electricity, as well as high levels of carbon emissions. It’s better to sell it directly to the civilian market – that way you can make more money. A problem has arisen; everyone knows the direction. The key is how to transform and how to achieve corporate upgrading? An individual’s career plan is closely linked to the company’s prospects and the development of the industry; sometimes, it is necessary to be proactive and think ahead in times of stability. Are the several major petrochemical companies in the southwest already struggling? Each finds its own way to complete the transformation. Yuntianhua is a large company; it has coal chemical industries in the Zhaotong area, as well as a Jinxin Chemical plant in Inner Mongolia. The company is also involved in industries such as organic fiberglass and biological materials. Its impact is significant, but it’s not enough to bring it to its knees ； Lutianhua is transporting coal from the Xuyong area to the industrial zone for gasification, thereby undergoing a gradual transformation. Chitianhua also has one coal chemical project that has been completed and another under construction in the Fuquan and Zunyi areas, gradually moving forward in its pursuit of the coal chemical industry... What about those companies focused on nitrogen production? Faced with the problem of insufficient air supply, do you have any good solutions?
Faced with a natural gas shortage, what plans do ammonia producers that rely on gas have? Energy conservation and cost reduction, as well as refined management, are just partial solutions that cannot address the problem completely. Are there any cases of successful transformation? Could you share the hardships and joys of moving forward under load? Thank you
The only way out is to change the production processes and vigorously develop coal chemical industry; otherwise, it will lead to a dead end.
Reply to 9# Blue Ocean King: Coal chemical processing is indeed one option, but the prerequisite is that there must be coal available near the facility. Even in areas where coal is present, people are reluctant to simply extract it and sell it; instead, they prefer to create more added value by processing it locally
Then there’s no other way; only **policy regulation remains.