Upgrading of Hubei Yihua’s Gasification Project (with technical renovation plan)

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Hubei Yihua’s Upgrading of Its Gasification Project (with Technical Reform Plan) Author/Source: Date: 2016-11-28 Clicks: 63 Hubei Yihua’s Upgrading of Its Gasification Project (with Technical Reform Plan) On the evening of the 25th, Hubei Yihua announced a plan for a private placement; the company intends to issue no more than 238 million shares at a price of not less than 7.47 yuan per share, thereby raising up to 1.781 billion yuan. These funds will be used to increase the capital of Hubei Yihua Chemical Co., Ltd. for the implementation of energy-saving technical upgrades to its gasification processes. According to the announcement, the funds raised will be used for the technical renovation of a 450,000-ton synthetic ammonia production facility in Hubei Province. The renovation will involve the use of advanced technologies such as the multi-nozzle opposed water-coal slurry gasification process, low-temperature methanol washing process, WSA wet acid production process, controlled heat transfer isothermal shift process, liquid nitrogen washing process, and low-pressure synthesis process, in order to comprehensively upgrade the existing 450,000-ton synthetic ammonia production facility. The construction period is 24 months, the after-tax internal rate of return is 9.16%, and the after-tax payback period for the project is 9.38 years. Upon completion of the renovation, it is expected that approximately 1,300 kWh of electricity and about 300 kilograms of coal can be saved per ton of synthetic ammonia produced. This leads to a significant reduction in production costs, thereby improving the company’s profitability and market competitiveness. Hubei Yihua stated that all the funds raised this time will be invested in its core business. The implementation of these projects will help the company reduce energy consumption and production costs, thereby enhancing its market competitiveness. Details of the investment projects funded by this capital raise: Basic information on the project: Project name: Increasing capital for Hubei Yihua Fertilizer Co., Ltd. to carry out upgrades to its coal gasification and energy-saving technologies. Total investment in the project: 1,780,580,000 yuan. Project construction period: 24 months. Location of project construction: Yihua Industrial Park, Xiaoting District, Yichang City. Entity responsible for project construction: Hubei Yihua Fertilizer Co., Ltd., a wholly-owned subsidiary of Hubei Yihua. Scope of project construction: The existing 450,000-ton ammonia production facility will be completely upgraded using advanced technologies such as multi-nozzle opposed water-coal slurry gasification, low-temperature methanol washing, WSA wet acid production process, controllable heat transfer isothermal shift process, liquid nitrogen washing, and low-pressure synthesis. The necessity of project development: At present, the Chinese economy is undergoing a wave of supply-side reforms. Overcapacity is a structural problem that has accumulated over the long term in China’s economic development. Supply-side reform is not only the top priority for economic work in 2016, but also a key element in advancing structural reforms in China’s economy. **To promote supply-side reform in the fertilizer and chemical industry, on the one hand, rising prices of factors such as electricity, coal, and natural gas are used to urge enterprises to save energy, reduce consumption, and improve efficiency ； On the other hand, various support policies are introduced to guide enterprises in carrying out technological upgrades. By the end of 2015, China’s urea production capacity was around 80 million tons, while domestic demand was around 60 million tons, resulting in a significant overcapacity. Overcapacity forces enterprises to continuously upgrade their technologies, reduce energy consumption and costs, and improve production efficiency. Reducing power consumption and coal consumption is one of the key factors in competition among fertilizer manufacturers. Compared with traditional fixed-bed coal gasification technology, new coal gasification technologies represented by the new water-coal slurry gasification technique possess significant advantages in terms of power savings, adaptability to different types of coal, and environmental protection. At present, many large enterprises in the industry have adopted the new water-coal slurry gasification technology to upgrade the ammonia synthesis units in the urea production process, gaining a significant competitive advantage. Companies need to carry out technical upgrades to their ammonia synthesis plants in areas where electricity and coal prices are high, in order to reach the industry’s leading standards. This project utilizes advanced technologies such as the multi-nozzle opposed water-coal slurry gasification process, low-temperature methanol washing process, WSA wet acid production process, controlled heat transfer isothermal shift process, liquid nitrogen washing process, and low-pressure synthesis process to comprehensively upgrade the existing 450,000-ton synthetic ammonia production facility. After the renovation, it is expected that approximately 1,300 kWh of electricity can be saved per ton of synthetic ammonia, and about 300 kilograms of coal can be saved per ton of synthetic ammonia. This leads to a significant reduction in production costs, thereby improving the company’s profitability and market competitiveness. Specific plan for project implementation: This project involves upgrading the company’s 450,000 tons per year ammonia synthesis plant by adopting advanced technologies such as the multi-nozzle opposed water-coal slurry gasification process. The details are as follows: 1. Changes and comparisons in the production process: (1) Before the upgrade: Process flow diagram for ammonia synthesis; (2) After the upgrade: Process flow diagram for ammonia synthesis; (3) A comparison table of the technologies before and after the upgrade is available at: http://img.yf116.cn/image/img/20161128/1643526023252.jpg 2. Specific upgrade measures: (1) Gas generation process: The existing coal rod systems and gas generation furnaces in this process will be removed, and 3 new water-coal slurry gasification furnaces will be built in their place. It includes supporting modifications for raw coal storage and transportation, water-coal slurry preparation, water-coal slurry transportation, slag treatment, ash treatment, coal slag storage and transportation, as well as an emergency high-pressure nitrogen safety system. After the technical upgrades, a multi-nozzle opposed water-coal slurry gasification technology is employed. Coal, water, and additives are mixed and ground in a coal grinder to produce water-coal slurry with a specific particle size distribution. The qualified water-coal slurry is pressurized by a slurry pump and sent from the slurry tank; it then enters the gasification furnace together with high-pressure oxygen supplied by the air separation unit, via process burners. Under the action of high-speed oxygen, the water-coal slurry is atomized, and through processes such as cracking, combustion of volatile components, and combustion gasification, gas is produced (comprising hydrogen, carbon monoxide, carbon dioxide, and water vapor). (2) Transformation process: All the existing medium-low-low transformation units are removed, and the transformation process is upgraded using an isothermal transformation technique (a two-stage controllable heat transfer transformation process). The controlled heat transfer isothermal conversion technology utilizes a two-stage \"controlled heat transfer conversion furnace\" to react carbon monoxide present in semi-water gas from the gas generation process with water vapor (under the action of a catalyst), thereby producing carbon dioxide and hydrogen and completing the CO conversion process. This ensures that 68.5% of the CO in the semi-water gas is converted to less than 0.4%, after which the resulting gas suitable for further processing is sent to subsequent stages. (3) Low-temperature methanol washing process: The low-temperature methanol washing process is used to replace the existing pressure swing adsorption units as well as the propylene carbonate decarburization and desulfurization equipment. The low-temperature methanol washing process utilizes the excellent properties of methanol at low temperatures (–50 to –60°C) to remove gas impurities such as CO2, H2S, and COS from the feed gas through physical absorption under low-temperature and high-pressure conditions, thereby producing purified gas with levels of carbon dioxide ≤10 ppm and hydrogen sulfide ≤0.1 ppm, which is then sent to the liquid nitrogen washing stage for further purification. (4) In the WSA wet acid production process, hydrogen sulfide and organic sulfur compounds removed through low-temperature methanol washing are emitted into the atmosphere, causing severe environmental pollution. Therefore, the WSA wet acid production process is used: the acidic gases are sent to the main burner of the incinerator in the acid production unit, where they mix thoroughly with air supplied by the combustion air fan and an appropriate amount of gas, at a temperature of 975–1025 degrees Celsius. This leads to the conversion of various sulfides into concentrated sulfuric acid. (5) Liquid nitrogen washing process: This project uses liquid nitrogen washing in place of the existing copper washing refining equipment. The liquid nitrogen washing process further purifies the feed gas coming from the low-temperature methanol washing step by using low-temperature liquid nitrogen. After impurities such as carbon dioxide, methanol, and water are removed from the feed gas originating from the methanol washing step using a molecular sieve adsorber, the gas is washed with liquid nitrogen in a nitrogen washing tower. Impurities such as carbon monoxide, methane, and argon in the gas are dissolved by the liquid nitrogen, thereby removing residual impurities like carbon monoxide, argon, and methane from the crude hydrogen. The stoichiometric ratio of nitrogen to hydrogen is adjusted to 1:3 to obtain purified gas; part of this gas is used to produce crude nitrogen which is then sent to the methanol washing step, while another part is combined with the gas returning from the methanol washing step and sent on to subsequent steps for ammonia synthesis. (6) Ammonia synthesis process: Following the renovation of this project, the ammonia synthesis process has been changed from high-pressure synthesis to low-pressure synthesis. The qualified hydrogen and nitrogen gas from the liquid nitrogen washing process is pressurized by a syngas compressor and then fed into the synthesis loop, where a catalytic reaction takes place; part of it is converted into gaseous ammonia, which is subsequently cooled, condensed, and separated to yield liquid ammonia as the final product, which is sent to the ammonia storage facility. The unreacted gas is pressurized by the syngas compressor and then recycled back to the synthesis tower. 3. Energy savings and consumption reduction of the project (1) Electricity savings: After the renovation of this project, the overall electricity consumption per ton of synthetic ammonia was reduced by 1,325.5 kilowatt-hours. With an annual ammonia production capacity of 450,000 tons, the project will save 596.48 million kWh in electricity consumption per year after the renovation. (2) Coal savings: After the renovation of this project, 0.2143 tons of standard coal are saved per ton of synthetic ammonia produced. With an annual ammonia production capacity of 450,000 tons, the project will save 96,400 tons of standard coal per year after the renovation. (3) Water and steam savings: After the renovation of this project, the water and steam consumption per ton of synthetic ammonia will be significantly reduced. 4. Project approval and environmental protection-related approvals: The registration and environmental impact assessment procedures related to this project are currently in progress. 5. Investment estimate for the project: The total investment in this project amounts to 1,780,580,000 yuan. The investment estimate is shown in the table below. 6. Economic evaluation of the project: According to the feasibility study report prepared by Beijing Blueprint Engineering Design Co., Ltd., this project represents a technical upgrade of the existing production lines, without any increase in production capacity. According to calculations, the implementation of this project will help the company save energy and reduce costs, thereby lowering production expenses. The project’s after-tax internal rate of return is 9.16%, while the after-tax payback period is 9.38 years.