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In mid-April, the first phase of the coal direct liquefaction project of Coal-to-Oil Ordos Company was successfully completed and accepted. Since construction began in August 2004, it has achieved a remarkable record: 4 years elapsed before trial operation began, 3 years before commercial operation started, and 5 years of stable operation over an extended period – a true example of successful demonstration operation. The completion acceptance marks the fulfillment of the historical mission of demonstration operation for the preliminary phase of the Shenhua coal direct liquefaction project, and it serves as a solemn declaration to the international community that the world’s first million-ton-scale industrial demonstration facility for coal direct liquefaction has operated with complete success. After ten years of dedication to overcoming difficulties, the fragrance of plum blossoms arises from the harshest conditions; the oil produced by the preliminary stages of the Shenhua coal direct liquefaction project has evolved from a situation where it relied on others and had to compromise, to one where it can now operate independently and reach anywhere. It is seeking to regain its value through high quality and competitive prices. The thermal test run of the complete rocket engine using liquid oxygen and coal-based aerospace kerosene was a complete success on April 12, 2015. This April, \"Shenyou\" entered into a strategic partnership with China National Aviation Fuel Group. If the completion inspection can be regarded as issuing a \"birth certificate\" for the preliminary phases of a coal direct liquefaction project, then the signing of the strategic cooperation agreement between Shenhua Group and China National Aviation Fuel Group, which spread news from the capital Beijing throughout the country, undoubtedly paved the way for China National Aviation Fuel Group to enter the elite circle of industry players. The construction scale of the Shenhua Coal Direct Liquefaction Project (pilot phase) is an annual production of 1.08 million tons of oil products, with the main products being diesel, naphtha, and liquefied gas. The project consists of a self-provided power plant and 54 unit installations. On December 30, 2008, the preliminary phase of the project enabled the use of coal for coal liquefaction, and the entire process was completed successfully in one go; commercial operation began in 2011. **According to the technical calibration data from the Energy Bureau, for the preliminary phase of the Shenhua coal direct liquefaction project, the comprehensive energy consumption per ton of oil produced is 1.69 tce/t; the coal consumption per ton of oil is 3.23 tce/t; the water consumption per ton of oil is 5.82 t/t. The energy conversion efficiency is 58.0%, while the yield of coal-liquefied oil is 50.2%. The expert group believes that this project represents the world’s first industrial-scale demonstration facility for coal direct liquefaction on a million-ton scale. It has developed a set of technologies with independent intellectual property rights and at the world’s leading level, filling a gap both domestically and internationally. From 2011 to 2014, the preliminary phase of Shenhua’s coal direct liquefaction project generated annual sales revenue of 5.71 billion yuan and profits and taxes of 1.43 billion yuan, showing good economic performance and strong profitability even amid high oil prices. In 2015, the plant operated using coal for 269 days, producing 718,000 tons of oil products, processing 1.5 million tons of cleaned coal, and selling 700,000 tons of various oil products. It generated revenue of 3.062 billion yuan and paid 962 million yuan in taxes and fees; as a result, it incurred losses. Finding value creation in tough times: What is the role of coal-to-oil technology in an era of low oil prices, and what is its future direction? Coal-to-oil company Ordos has given a positive response through concrete actions. The Shenhua coal direct liquefaction project is the world’s first industrial demonstration plant for coal direct liquefaction on a million-ton scale. It has developed a set of technologies with independent intellectual property rights and at the world’s leading level; such technologies are unique and cannot be replicated, granting it a core competitive advantage. Although oil prices are currently at low levels, a reasonable return to normal levels is inevitable in the long term. China’s resource profile, characterized by a shortage of oil and gas but an abundance of coal, makes coal-to-oil conversion the most effective method to date for achieving the clean and efficient transformation of coal. Coal-to-oil, as an **energy strategy**, represents an important strategic measure for **economic development and long-term stability**. High tax burdens, low oil prices, and single-line operation constitute the \"three major challenges\" plaguing coal direct liquefaction projects. **With taxes levied based on the price of refined oil products, the overall tax burden on diesel, gasoline, and naphtha currently accounts for 45–62% of the selling price of these oils. In a market with low oil prices, it is inevitable that coal-to-oil projects will incur losses. Furthermore, since the commercial operation of coal-to-oil projects, the oil products produced have had to rely on oil companies for sales due to the lack of a sales network, preventing high-quality and scarce oil products from commanding premium prices. The single-line operation of the world’s first industrial demonstration plant for coal direct liquefaction on a million-ton scale poses significant risk factors. Once a single component fails, the entire system comes to a standstill, resulting in incalculable economic losses. Thankfully, the challenges that previously hindered the development of coal-to-oil projects are now showing signs of improvement. This year, Ordos Company has begun to set up a production line for the indirect liquefaction of coal, with an annual output of 180,000 tons of petroleum products, including diesel, heavy waxes, and alcohols. The operation of both direct and indirect liquefaction routes not only enables the sharing of resources and technologies but also facilitates the correction of defects in the equipment; the combination of these two processes results in a more diverse range of products. The issue of excessive tax burdens has been submitted as a proposal to the National **Congress** this year. At present, the State-owned Assets Supervision and Administration Commission of the State Council and the National Development and Reform Commission have in principle agreed to provide tax exemptions for coal-based petroleum products; the Ministry of Finance and the State Taxation Administration are currently in discussions, and a policy for such tax exemptions is expected to be introduced within this year. In terms of improving the quality and efficiency of petroleum products, the coal-based high-density jet fuel produced by Ordos Coal-to-Oil Company was tested in a flight for the first time in 2015, with successful results; this marked China’s entry into the world’s leading ranks in the field of research on coal-based jet fuels. Special oils produced through the direct liquefaction of coal have demonstrated good performance in tests conducted on Antarctic research ships, and coal-based special oils hold great potential in the military as well as in the aviation and aerospace industries. In 2015, Shenhua Group’s internal oil consumption amounted to 120,000 tons, accounting for 37% of the total diesel sales of the coal-to-oil Ordos Company. The proportion of oil products sold by CNPC and Sinopec dropped from 92% in 2014 to 57% in 2015, a decrease of 35 percentage points, thereby significantly reducing the market risks associated with a single sales channel. Along the way, the pioneers in coal-to-oil production have taken practical actions to achieve the goal of maintaining sufficient cash flow when Brent crude oil prices are at $40 per barrel, and achieving good profitability when the price is at $60 per barrel.