Visiting the world’s biggest single coal-to-liquid project in Yinchuan, China

On 12 June, I had  the pleasure of visiting the world’s biggest single coal-to-liquid (CTL) project, accompanied by Professor Yao Qiang, Tsinghua University, Professor Yu Zhufeng and Mr Wang Qiang, Shenhua Research Institute. The general director of the CTL project construction headquarters, Mr Cai Lihong, received us and showed us round the whole demonstration site. Dr Yao Min, the Vice Chairman of Shenhua Ningxia Coal Group (SNCG), together with a team of senior engineers provided us with further information about the project.

The CTL project is located in the Ningdong Energy and Chemical Industry Base (referred to as Base), 40 km away from Yinchuan, the provincial capital of the Ningxia Hui Autonomous Region, in the western part of China. The Ningxia Hui Autonomous Region is located in the upper reaches of the Yellow River and the ‘Base’ is only 35km from the Yellow River with abundant water resources, which is crucial for CTL.  The project is run by the SNCG (Shenhua Group owns 51% and Ningxia local government owns 49%).

Our visit started from the ‘Base’ museum, which gave us an overview of the ‘Base’ and its future. The Ningdong Energy and Chemical Industry Base has a planning area of 3484 km2, with the Ningdong core area of 885 km2. It aims to create an industry base for coal, power, coal chemicals and new materials. By 2020, coal production will reach 0.13 billion tonnes, which makes it one of the country’s most important large-scale coal bases. The installed capacity of thermal power will reach 160 GW with 60 GW delivered to the west-east power transmission grid. Solar power and wind power are also install in the ‘Base’. The production capacity of coal chemical products will exceed 20 million tonnes (Mt), which makes it a national major coal chemical base. At the moment, 32 companies have entered the base. SNCG has the biggest coal chemical plant there. The planned overall investment for the fixed assets of the industrial projects is RMB 300 billion yuan; achieving an industrial added value of RMB 67 billion and RMB 54 billion for related industries in the zone; and helping the local economy to add RMB 15 billion in fiscal revenue.

We then toured around the SNCG plants at the Base. SNCG has a registered asset of RMB 21 billion yuan, with total existing assets of RMB 141.2 billion yuan in 2017. The SNCG’s main business lies in coal mining, washing and processing. They started work on coal to chemicals with its coal-to-methanol project in 2006, then moved on to produce olefin, polyoxymethylene, polypropylene, and more. Its latest achievement is the 4 Mt per year production indirect coal liquefaction demonstration project.

The construction of this CTL project started on 29 September 2013 and went into commission at the end of 2016. The whole site covers an area of 560 hectares and consists of 2 trains of 2 Mt of oil production units and auxiliary facilities of 12 sets of 101,500 m3/h ASU (air separation units), 28 gasifiers, 4 trains of rectisol, 3 trains of SRU methanol unit, a coal-fired power generation plant, and a waste water treatment plant. The whole compound annually consumes 24.5 Mt of coal and 25 Mt of water.

The project required an investment of about RMB 55 billion yuan. It can turn more than 20 Mt of coal to 4 Mt of oil products annually, including 2.7 Mt of diesel, 980,000 t of naphtha petroleum and 340,000 t of liquefied gas. The by-products include 200,000 t of sulphur, 75,000 t of mixed alcohol and 145,000 t of ammonium sulphate.

The project enabled many technology transformation and innovations. 37 Chinese home-grown technologies, equipment and materials were developed for the project. Of these, the million tonne capacity of Fischer-Tropsch synthesis and processing technology of synfuels is developed by the Shanxi Coal Chemistry Research Institute, Chinese Academy of Sciences. The German GSP dry pulverized coal gasification technology have been innovated to make the gasifier, named as Shenning Gasifier, running continuously. Its operation quality is leading the world. MTP catalyst and 100,000 m3/h capacity of ASU technology are also amongst the world’s most advanced technologies.

To reduce water consumption, the project maximised the water recycle and cooling water vaporisation reduction and aims for near zero waste water discharge. To convert 1 tonne of oil, it consumes 3.5 tonnes of coal and 6.1 tonnes of water. Close attention has been paid to emissions control. The total spending on environmental protection accounts to near 15% of the total investment.

China has rich coal resources, but lacks of oil and gas. This CTL project is built for Chinese energy security, but it has to balance the books as well. With the low oil price, the SNCG is looking to produce high end, niche products, such as lubricating oil, to maximise the financial contribution.