The Catalyst Review - April 2015 - 9

SPECIAl fEATuRE
Datang SNG plants use powdered coal to feed their pressurized gasifiers. These gasifiers generate huge amounts of waste water
with complex chemical composition. Treatment of this type of waste water is still a major challenge to the coal chemical industry.
Activated coke adsorption plus biological treatment of the water has been proposed. Datang's SNG plant includs a waste water
treatment facility at 280m3/h scale as its partial solution to the waste water issue.
Brown coal accounts for 40% of the total China coal
reserves. Some power generation and coal chemical
firms are developing water extraction technology
to save fresh surface water. Extracting water from
brown coal can recover 0.35 ton of water, reducing
0.3 ton SOx, 0.3 ton NOx, 0.094 ton CO2 and 0.086
ton particulate emission, for each ton of brown coal
consumed (Meng 2014).

figure 7. China coal mines distribution.

Carbon emission is also a factor in building CTL
facilities in China. There are seven provincial trial
carbon tax exchange markets open in China, and they
processed 13.75 million tons of total CO2 transactions;
the equivalent to 0.5 billion RMB (US$0.08 billion) in
the first 10 months of 2014 (Xiao 2014). As a result,
Shenhua DCL plant production costs can increase by
30% if carbon tax increases from current $10 to $50
per ton, as planned by the State government (Gu
2014). For each cubic meter of SNG produced, 5kg
CO2 will be discharged and five tons of water is
required (Ju 2014). CO2 from SNG will be over
Source: Author
17 million t/y before the end of 2030. Emission of
CO2 from CTL is estimated at 0.65 ton per barrel of oil
produced. Thus, CO2 from planned 40 million t/y CTL plants may reach 3.7 million t/y. Someone even estimated that total CO2 from
the coal conversion industry can be almost as high as 470 million tons in 2015 (Gu 2013).

Summary
Since 2013, coal prices have been falling dramatically and this reduces the
SNG cost from 2 RMB (US$0.32) to 1.7 RMB (US$0.27) per cubic meter of
gas produced. Domestic NG price maintained at 2.5 RMB (US$0.40) per
cubic meter. This seemingly led to better profitability for all CTL players.
However, in the second half of 2014 crude oil prices also decreased
significantly, which made coal chemical players lose the benefit from
low coal prices. It is believed that the CTL and MTO break-even point is
at a crude oil price of US$60 per barrel. Most CTL players are backing off
from the coal conversion business, while bigger ones like Shenhua Group,
Yanchang Petroleum, and Yankuang Energy added more investments to the
unpopular coal conversion sector. They believe that crude oil will be back to
its normal above $100 dollar price range, and CTL will be profitable in the
long run.

Table 3. Coal consumption classification.
Coal Consumer

Total Usage
(million ton)

Percentile (%)

Industrial heating oven

510

Home use

160

3.8

Metallurgical coke

600

18.0

Power generation

2000

48.1

Construction materials

620

14.9

Coal conversion industry

220

6.0

1.2

Others

13.6

Source: Shen 2014.

Coal will be the major fossil energy source in China for a long time. Table 3 shows the coal application distribution in the China
market. Rich coal resources and lacking oil and gas supplies will be a long-term energy structure in China. In 2013, China produced
3.68 billion tons of coal, almost half of the total world production. Petroleum consumption was nearly 0.5 billion tons in 2013, but
58.1% of the oil was imported, while only 8.13% of the coal was imported from abroad. Similar to oil, a major part of natural gas was
imported (31.6%), reaching 53 billion m3 in 2013 (Li 2014).

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April 2015

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