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China on Track with Construction of Major Coal-to-Liquids Project

18 November 2005

State-owned Shenhua Group, China’s largest coal company, has completed 30% of the construction of the first phase of its major coal-to-liquids project at the Shenfu Dongsheng coalfields in Inner Mongolia. Production is scheduled to begin in 2007, with initial output of approximately 1 million tons per year, or about 840,000 gallons per day.

With the addition of three subsequent phases, Shenhua is planning an increase in output to 20 million tons by 2020: about 17 million gallons of synthetic fuels and chemicals per day.

Shenhua Group is also involved in a separate coal liquefaction feasibility study with Shell.

Shenhua is using direct coal liquefaction from the Hydrocarbon Technologies (HTI), a subsidiary of Headwaters, for the first two phases, and indirect coal liquefaction technology from Sasol for the subsequent two phases. The development targets are:

  • 2007 total output: 1 million tons (direct liquefaction)

  • 2010 total output: 5 million tons (direct liquefaction)

  • 2015 total output: 15 million tons

  • 2020 total output: 20 million tons

Indirect coal liquefaction first gasifies coal and then converts the coal-derived syngas into fuels and petrochemicals using Fischer-Tropsch technology. There are several technology and process alternatives for this type of approach to CTL.

Direct liquefaction, by contrast, breaks down the complex coal structure into smaller component molecules which then can be further refined into clean liquid fuel products by reducing the contents of sulfur and nitrogen.

In the HTI process, pulverized coal is dissolved in recycled coal-derived heavy process liquid under typical hydrocracking temperature of 435º to 460ºC in the presence of elevated hydrogen overpressure (about 170 bars).

Most of the coal structure is broken down in the first-stage reactor. Liquefaction is completed in the second-stage reactor. A proprietary catalyst is dispersed in the slurry for both stages. The intermediate coal liquids from the mild hydrogenation step will be further upgraded using conventional refining techniques to produce gasoline, jet and diesel fuels.

As to the relative energy and environmental attributes of the two approaches, an analysis done by Robert H. Williams and Eric D. Larson of the Princeton Environmental Institute, Princeton University on different methods of coal liquefaction found that:

...although direct liquefaction conversion processes might be more energy efficient, overall system efficiencies for direct and indirect liquefaction are typically comparable if end-use as well as production efficiencies are taken into account.

It is shown that some synfuels derived via indirect liquefaction can outperform fuels derived from crude oil with regard to both air-pollutant and greenhouse-gas emissions, but direct liquefaction-derived synfuels cannot.

Deployment now of some indirect liquefaction technologies could put coal on a track consistent with later addressing severe climate and other environmental constraints without having to abandon coal for energy, but deploying direct liquefaction technologies cannot.

And finally, there are much stronger supporting technological infrastructures for indirect than for direct liquefaction technologies.

[...] Especially promising is the outlook for the indirect liquefaction product dimethyl ether, a versatile and clean fuel that could probably be produced in China at costs competitive with crude oil-derived liquid fuels. An important finding is the potential for realizing, in the case of dimethyl ether, significant reductions in greenhouse gas emissions relative to crude oil-derived hydrocarbon fuels, even in the absence of an explicit climate change mitigation policy, when this fuel is co-produced with electricity.

The Shenfu Dongsheng Coal Fields are located between the northern edge of Yulin Prefecture, Shaan’xi Province and the southern edge of Erdos City, Inner Mongolia Autonomous Region. The fields are the largest in China and one of the seven largest in the world.

Shendong
The location of the Shenfu Dongsheng (Shendong) coalfields. Click to enlarge. The map is of the much larger Shenhua Project, which is designed to increase coal production, rail transshipment, power generation and export. The ultimate target is the production and transport of 100 million metric tons of coal per year.

The fields extend to an area of 31,000 square kilometers, with an estimated reserve of 223.6 billion tons. Under current plans, Shenhua will develop an area of 3,481 square kilometers will be developed, with a confirmed reserve of 35.4 billion tons.

The coal is of premium grade, with low sulphur (0.35%~0.5%), low ash (6%~8%), medium to high calorific value (lower calorific value: 5800~6200 kcal), and low ash fusion point, making it very suitable for a variety of applications from power generation and metallurgical engineering, to coal gasification and coal liquefaction.

Shenhua has been working on the design and planning of the CTL project for a number of years, including its work with Headwaters and Sasol.

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November 18, 2005 in China, Coal-to-Liquids (CTL) | Permalink | Comments (4) | TrackBack (0)

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Comments

Hi!

I would appreciate receiving any updates on progress.

Thanks


Bill Millard

I would like to see the environmental outputs from the resultant energy products. Coal is largely carbon. Add hydrogen, make hydrocarbons, burn them, and you have CO2, masses of it. And what about the energy required in the manufacturing process - does it come from burning coal? I suspect this is no way an environmentally friendly way to make liquid hydrocarbon fuel!

Hugh,
You need to read the fine print I guess. Diesel fuel from coal gasification (or "indirect liquefaction") is almost zero sulfur. It is also low in aromatics. Hence there are some air pollution benefits.

Of course, you could also capture the CO2 produced in the liquefaction plant and sequester it (however you may do that at an inland coal mine). Now, I won't be betting money on the Chinese going out of their way to capture CO2...

The Chinese are moving forward with this project mainly to reduce the effect of volatile oil prices on their economy, I suspect. In that they seem to be somewhat ahead of US politicians.

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