Break-even point for coal-to-oil production

When Yankuang’s million-ton-scale coal indirect liquefaction plant came online some time ago, Sun Qiwen said that, based on current coal and oil prices, once the plant is operating at full capacity, it is expected to generate annual sales revenue of 4.286 billion yuan, profits of 146 million yuan, and tax revenues of 2.151 billion yuan. Yankuang probably uses a crude oil price of $45 as its break-even point. Around 2013, Yankuang reported on this project, stating that once it reached full capacity, it would be able to produce 1.15 million tons of petroleum products per year – of which 790,000 tons would be diesel, 260,000 tons naphtha, and 100,000 tons liquefied petroleum gas. This would generate annual sales revenue of 7.6 billion yuan, an average annual profit of 1.6 billion yuan, and tax payments of 2.1 billion yuan. In comparison, the profit is only 10% of the original amount. Yitai’s coal indirect liquefaction plant with a capacity of 160,000 tons per year used to generate profits of over 100 million yuan per year; however, due to low oil prices, its profits in the first half of 2015 were only a little over 2 million yuan. I’ve seen before that Li Yongwang from Zhongke Synthetic Oil stated that the break-even point is $70.

http://www.ykjt.cn/xwsx/text/2015-10/16/content_545057.htm According to internal calculations by Yunkuang, based on current coal and oil prices, it is estimated that in 2015 the company will achieve sales revenue of 4.286 billion yuan, a profit of 146 million yuan, and tax revenues of 2.151 billion yuan. “This is based on a coal price of 220 yuan per ton and an oil price of 40 dollars per barrel. ”Sun Qiwen said. What are everyone’s thoughts on this calculation? It’s quite different from the estimates made by the Petrochemical Federation.

“There are several key aspects in the process of converting coal into petroleum products, one of which is the catalyst. The catalysts we have developed independently feature good selectivity, high activity, and excellent mechanical strength. Foreign similar devices produce 600 tons of oil products per ton of catalyst, while we produce 3,000 tons of oil products per ton of catalyst, **reducing the consumption of catalysts. The second is the reactor. Since we produce large volumes of oil products, it is necessary for the individual production units to have sufficient capacity; we have developed on our own the world’s largest Fischer-Tropsch synthesis reactor, with a diameter of 10 meters and a height of 55 meters. ”Sun Qiwen said. “Similar foreign devices can produce 600 tons of oil per ton of catalyst; this refers to the iron-based slurry-bed catalysts used by Sasol in South Africa. The technology developed by Yankuang is based on that of Sasol, yet the oil production rate has increased to 3,000 tons per ton of catalyst – is it possible for the newer version to outperform the original so significantly? I remember that Zhongke Synthetic Oil produced only around 1,200–1,500 tons of oil.

http://www.coalchem.org.cn/news/html/800201/165053.html In the first half of 2015, with WTI oil prices at $53 per barrel, the Yitai coal-to-oil demonstration plant, whose designed production capacity was only 180,000 tons per year, was still able to turn a profit! http://news.emca.cn/n/20150806092547_3.html Sources within Lu’an say that the break-even point for Lu’an’s coal-to-oil project is at $42 per barrel of oil, but many experts doubt this claim. I’m drunk too; how can there be such a big difference from the calculations done by the Petroleum Federation?

Try to find out the profit and loss figures for Shenhua Ordos’s million-ton coal direct liquefaction project for the years 2014 and 2015; I haven’t been able to locate them yet.

Coal-to-oil chemical companies include direct liquefaction, olefin, and methanol projects, which are calculated separately; losses are inevitable

Shenhua Baotou olefins are profitable.

This post was last edited by donfly on 2015-10-21 at 10:39. A analysis was conducted by Sinocem Synthetic Oil Company at http://coalchem.anychem.com/2014/06/16-841.html and http://coalchem.anychem.com/2014/06/17-355.html. A regression analysis was also conducted on coal prices and oil prices. The equation obtained is for a 11% profit rate. \"Profit Analysis of Coal-to-Oil Production under Different Oil and Coal Prices\" takes coal price as the independent variable (x) and international crude oil price as the dependent variable (y); by performing trend line analysis and linear regression, the following formula is obtained: y = 0.0898x + 47.644

“New technologies require only 3.48 tons of standard coal to produce 1 ton of oil products. One ton of the new catalyst can be used to produce 1,200–1,500 tons of oil products, and the entire production process meets **environmental standards**. The integrated optimization of the autonomous high-temperature slurry bed synthesis system increased the energy utilization efficiency to 44% to 45%. ”Li Yongwang said. (Originally published in People’s Daily, Page 20, June 16, 2014) http://www.cas.cn/xw/cmsm/201406/t20140616_4137887.shtml

Enterprises are concerned with efficiency; as for whether indirect coal-to-oil conversion is feasible, South Africa has been working on this for decades. The cost of catalysts required to produce one ton of oil is over 250 yuan at SASOL in South Africa, while it is below 100 yuan for Yitai’s 160,000-ton project. It was said online by an Itai shareholder.