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Siemens to Supply Coal Gasification Technology to Shenhua Group for DME Project; Shenhua Expanding Direct Coal Liquefaction Plant

Shenhua Ningxia Coal Industry Group Co. Ltd. (SNCG) in China has awarded Siemens Power Generation (PG) a €30 million (US$39 million) contract for two entrained-flow gasifiers with a thermal capacity of 500 MW each and further key equipment for a coal gasification plant. SNCG is a subsidiary of the state-owned Shenhua Group, the largest Chinese coal producer.

The coal gasification plant is to be used for the Shenhua Ningmei dimethyl ether (DME) project in Ningxia Province in northwestern China. (Earlier post.) When the plant reaches full operation in early 2009, Shenhua Ningmei DME will produce 830,000 tons per year of the synthetic fuel.

Siemens PG acquired Sustec’s coal gasification activities in mid-2006 in order to supplement its power plant business with products and services related to coal gasification. (Earlier post.) The acquisition comprises the German firm Future Energy GmbH as well as a 50% stake in a Chinese joint venture with the Shenhua Ningxia Coal Group.

The Shenhua Ningmei DME project is the first major coal gasification plant contract that Siemens has been awarded since the acquisition of Sustec.

Siemens Fuel Gasification Technology (formerly Future Energy) GSP Gasifier

Siemens Fuel Gasification Technology’s (formerly Future Energy’s) gasification technology is an entrained-flow pressure gasification system that gasifies a stream of pulverized coal (or atomized liquid fuel or a fuel slurry) with oxygen. Different implementations of the gasifier technology can handle different feedstocks, such as biomass. The gasification pressure ranges from 5 to 26 bar, and the gasification temperature ranges from 1,400º to 1,600º C.

The method offers very high carbon conversion (greater than 99%), and produces a tar-free synthesis gas.

Separately, Xinhua reported that Shenhua Group plans to expand the output of its direct coal liquefaction plant in Mongolia to 6 million tonnes a year by 2010. The project currently is slated to produce 3.2 million tonnes of fuel a year. The first phase, at a cost of 24.5 billion yuan (US$3.15 billion) begins production at the end of 2007.

Shenhua is also building indirect coal liquefaction plants in partnership with Sasol and Shell.

Shenhua’s first direct coal liquefaction train is due to come online in 2007.

Indirect coal liquefaction (ICL) first gasifies the coal and then uses a Fischer-Tropsch process to convert the syngas into products. Direct coal liquefaction (DCL) cuts out the intermediate gasification step, and uses high-pressure hydrogenation to take the coal directly to the end product. DCL is based on the Bergius process, discovered by Friedrich Bergius in 1921 (slightly before Fischer and Tropsch).

(Bergius, who shared the Nobel Prize in Chemistry in 1931 with Carl Bosch for their contributions to the invention and development of chemical high-pressure methods, also tackled developing a process for the hydrolysis of cellulose in wood and similar substances to sugar for fermentation.)

According to the Headwaters Group, which is supplying the DCL technology to Shenhua for the Mongolian plant, one of the main differences between DCL and ICL is the quality of the raw liquid products.

DCL raw products contain more ring structure. Therefore DCL naphtha is an excellent feedstock for production of high-octane gasoline, while DCL distillate requires considerable ring opening (mild hydrocracking) to generate on spec diesel fuel. On the other hand, the straight-chain structure hydrocarbons produced by ICL technology result in high-cetane diesel fuel but ICL naphtha needs substantial refining (isomerization and alkylation) to produce on spec gasoline. Both processes produce low-sulfur, low-aromatic fuels after the refining step.

DCL plants produce more liquid fuel per ton of coal than ICL plants. However, ICL plants are better suited for polygeneration of fuels, chemicals and electricity than DCL plants.

—American Coal Council publication, p. 50

In addition to the greenhouse gas emissions issues attendant to both processes—which would need to be handled with some form of capture and storage—DCL liquids have a high content of polycyclic aromatic hydrocarbons (PAHs), a class of organic compounds that include potent mutagenic and carcinogenic compounds.

Further hydrogenation can deal with the PAHs, but at additional financial and energy cost.

Overall, China will invest more than one trillion yuan (US$128 billion) to develop alternative coal-based synthetic fuels projects to ease the country’s dependence on oil imports. The projects aim to produce 30 million tons (about 600,000 barrels per day) of coal liquids and 20 million tons of dimethyl ether (DME) by 2020. Coal-to-olefin (CTO) output is expected to hit 8 million tons and coal methanol to reach 66 million tons. (Earlier post.)




I gather an Inconvenient Truth hasn't hit the cinema screens in China just yet. 30+20+8+66 m-tons of coal per year as feedstock by year 2020, with process emissions about the same as tailpipe emissions for fuels but possibly some saving through electrical cogeneration. I sure hope using those funny lightbulbs makes up for it.


How much coal does china have left? It seems like they'll be burning through it (literally). Sounds like there could be serious air/water quality issues with the combustion of these fuels as well. Where do they get the hydrogen for the hydrogenation steps. Does it come out of the coal during the gasification or is it an extra ingredient that is added to the process?


China has less coal then the us but still they have HUGE amounts.


Incidentally, the 1st stage of the project, (3.2million tons/yr) is enough fuel for approx 2.75 million "average" small cars.

If you divide the CAPEX ($3.14 billion) by these cars this turns out to be the surprisingly affordable $1,148 per car.

If you take out the capital spend on projects like these, then the cost of fuel produced is very reasonable.

Indeed in Europe the average sales tax on a new car would be greater than $1,148.


Is this article appropriate? I think this plant will produce syngas - not any liquid.

Paul Dietz

The syngas is going to be turned into DME (dimethyl ether), which if I understand correctly can be used in diesel engines.

Roger Pham

Thanks, Andy, for putting the number in perspective. At 600,000 barrels daily, this is a very productive facility, considering China's total daily consumption of petroleum is 6 million barrels. Since 1/2 of China petroleum is imported, a few of these facilities will allow China petroleum independence. Furthermore, biomass gasification can also be done on these gasifier with minor modification. In fact, China plan to increase biomass energy usage to 20% of total energy consumption in 10 years, per a recent GCC article. This investment would be great for that purpose also.

Wondering if any such facility is planned here in the USA? If not, then what are we waiting for?

CTL or BTL is the first step, but eventually, biomass to H2 for transportation can be done. However, gasification for solely H2 production should be done locally in dispersed smaller facilities due to the inefficiency of H2 transportation.

tom deplume

DME is a diesel fuel replacement meant for their transit fleets. Bejieng is desparately trying to clean up its air before next year's Olympics and DME is one of their stategies.

steve Finch

I operated a DME and Ethanol plant for 11years whilst in Australia.I am now in jackson Mississippi,USA, just arrived here.
It is not just used for deisel,it can be and is being used in cars and bar-B ques.
It is an excellnt product.I am now in the USA. I hav dsigned a a high tch.Ethanol procss that does not require Distillation,I am looking for a very small investor as w can also build a small dme plant as well.
I just want a LAB size plant we could have running from Greenery,like Guinea Grass or Food Grade Sorghum or sweet sorghum and extract the Methanol from the Trees and the stems of the Sorghums to make the DME not necessary to have coal.

steve Finch

I meant to say DME already is replacing petrol driven cars not just running in Deisels.

Cheryl Ho

China is already most advanced in commercial use of DME as a mixture with LPG. China is mainly interested in DME production from their own coal resources as national policy. South Korea is also interested in DME. As KOGAS is predominant in handling gas in South Korea , MOU for market study in South Korea has been signed between TOTAL and KOGAS quite recently. Their interest of DME is for LPG market as well as fuel for diesel trucks.

If you would like to know more on the latest DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:

DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

For more information:


This is my visit to the site of DME blog. I am from India. So far we have not progressed any thing I believe.

Andres A. Alba L.

Dear Sirs.

We are interested in developing this tecnology in our country the Dominican Republic, West Indies, we have large Coal deposits and will like to exploit them for generation of electricity.

Please contact us ASAP.

Thanking you in advance, I remain wayting on your answers.

Andres A. Alba L.

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