China’s $24 Billion Coal-to-Oil Project: 2nd Gen Direct Coal Liquefaction

      Coal-to-oil by direct liquefaction is a process that bypasses gasification, which is a normal step in indirect coal liquefaction. The DOE’s NETL describes the process of direct coal liquefaction and compares it to indirect coal liquefaction as follows:

“Direct coal liquefaction involves contacting coal directly with a catalyst {often cobalt iron-based} at elevated temperatures and pressures with added hydrogen (H2), in the presence of a solvent to form a raw liquid product which is further refined into product liquid fuels. DCL is termed direct because the coal is transformed into liquid without first being gasified to form syngas (which can then in turn be transformed into liquid products). The latter two-step approach, i.e. the coal to syngas to liquids route is termed indirect coal liquefaction (ICL). Therefore, the DCL process is, in principle, the simpler and more efficient of the two processes. It does, however, require an external source of H2, which may have to be provided by gasifying additional coal feed, biomass and/or the heavy residue produced from the DCL reactor. The DCL process results in a relatively wide hydrocarbon product range consisting of a variety of molecular weights and forms, with aromatics dominating. Accordingly, the product requires substantial upgrading to yield acceptable transportation fuels.”

     The world’s largest single coal-to-liquids (CTL) project is located in the Ningdong Energy and Chemical Industry Base, 40 km away from Yinchuan, the provincial capital of the Ningxia Hui Autonomous Region, in the western part of China. Construction began in 2013, and it was commissioned in 2016. To convert 1 ton of oil, it consumes 3.5 tons of coal and 6.1 tons of water. China has a high demand for oil but a low supply. They do, however, have a high supply of coal. Thus, the country has long developed CTL technology. Liquifying coal results in double the CO emissions relative to burning oil. It is, however, more readily captured. According to Wikipedia, this project currently makes 4 million tons/year of diesel & naphtha. The tables below show all the CTL projects in the world, non-U.S. and U.S. Most of the U.S. projects have been cancelled as uneconomical. The U.S. likely would be developing those projects if it hadn’t been for the discovery and production of significant shale gas and oil reserves over the past few decades.

Ningdong Energy and Chemical Industry Base

     The DCL technology DOE helped to develop with Hydrocarbon Technologies, Inc., HTI (now part of Headwater, Inc.), was licensed to Shenhua Corporation of China in 2002, which built a DCL plant in Erdos, Inner Mongolia based on Headwaters technology. That first DCL plant began operations in 2008. According to NETL:

“The DCL process involves adding hydrogen (hydrogenation) to the coal, breaking down its organic structure into soluble products. The reaction is carried out at elevated temperature and pressure (e.g., 750 to 850°F and 1,000 to 2,500 psia) in the presence of a solvent. The solvent is used to facilitate coal extraction and the addition of hydrogen. The solubilized products, consisting mainly of aromatic compounds, then may be upgraded by conventional petroleum refining techniques such as hydrotreating to meet final liquid product specifications.”

     China’s CTL capacity rose 24% to 11 million tons in 2023 compared to 2019. A planned 4 million ton per day CTL project expected to cost $24 billion is being developed by China Energy Investment Corporation, formerly Shenhua, and is expected to begin operations in 2027. This will be built in the Xinjiang region, which is rich in coal but remote and far away from consumers. This would make up more than a quarter of China’s current CTL capacity, but other CTL projects are in the works as well. According to Global Times, the project is expected to produce 4 million tons of CTL products annually, including 3.2 million tons from direct liquefaction and 800,000 tons from indirect liquefaction.

“The project combines coal mining, coal-to-oil conversion, coal chemicals, renewable energy, and new materials production. It features the world's first second-generation CTL technology and is the first coal-to-oil project in Xinjiang.”

"The project taps into Hami's coal and renewable energy resources to build a national coal-to-oil and gas strategic base, boosting efficient coal use and strengthening Xinjiang region's role in China's energy security," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Wednesday.

     It is uncertain whether carbon capture will be a feature, but that seems a likely possibility as the state-owned company operates CCS projects.

   

 

 

References:

 

China Energy Investment readies $24bn for coal-to-oil project. Ed Pearsey. Offshore Technology. October 10, 2024. China Energy Investment readies $24bn for coal-to-oil project - Offshore Technology (offshore-technology.com)

Coal liquefaction. Wikipedia. Coal liquefaction - Wikipedia

Direct Liquefaction Processes. DOE. National Energy Technology Lab (NETL). 10.6. Direct Liquefaction Processes | netl.doe.gov

Coal Gasification and Liquefaction. Civils360. February 9, 2022. Coal Gasification and Liquefaction - Explained | UPSC | Civils360 IAS

Visiting the world’s biggest single coal-to-liquid project in Yinchuan, China. Xing Zhang. June 27, 2017. IEA. Sustainable Carbon. Visiting the world's biggest single coal-to-liquid project in Yinchuan, China - ICSC

China Energy to invest $24 billion in coal-to-liquid project. October 10, 2024. DieselNet. news: China Energy to invest $24 billion in coal-to-liquid project

CHN Energy Investment Group launches 170 billion yuan project in Xinjiang's Hami. Zhang Yiyi. Global Times. October 9, 2024. CHN Energy Investment Group launches 170 billion yuan project in Xinjiang's Hami - Global Times