The plants will be located in coal-rich Shanxi, Shaanxi and Yunnan provinces, as well as Inner Mongolia Autonomous Region.

State-owned Shenhua Group, China’s largest coal company, announced in November 2005 that it had 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. (Earlier post.)

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

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 liquid fuel products by reducing the contents of sulfur and nitrogen.

Direct liquefaction conversion may have a slight edge in terms of process energy efficiency, according to some studies, but overall system efficiencies are basically comparable.

However, while some indirect liquefaction pathways (such as the production of dimethyl ether) may outperform fuels derived from crude oil with regard to both air-pollutant and greenhouse-gas emissions, direct liquefaction-derived fuels do not.

Resources:

• A comparison of direct and indirect liquefaction technologies for making fluid fuels from coal. Williams, Robert H. and Larson, Eric D. Energy for Sustainable Development VII, December 2003, 103-129