coal to chemical in china

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中国化工信息中心

China National Chemical Information CenterCNCIC Consulting

Copyrig ht © CNCIC Consulting

Development and Trends of Modern Coal-to-

chemicals in China

Orchid Yang

Deputy Director of Research Institute ofIndustry Economics

CNCIC

[email protected]

CPIC

Singapore, 19th July, 2012





CPIC2012

Drivers for development of coal to chemicals

Current status and future projects

Problems, risks & industry policies

Summary

CONTENTS

No.2





CPIC2012

Proven fossil energy resources

Coal

653.757%

Oil

259.6

22%

NG

245.4

21%

Coal

145.795%

Oil

4.0

2%

NG

4.2

3%

ENERGY RESOURCE

DISTRIBUTION, btce

Coal:22.3%

Oil:1.5%

Gas:1.7%

The world’s proven reserve of fossilenergy is 1.16 trillion tce and can be

used for 50-100 years

China is rich in coal and lack of oil

and natural gas: Coal accounts for

around 95% of t he total, oil & gas

accounts for 5% –

20

40

60

80

100

120

140

Coal Oil Natural gas

134

46

6369

15

38

World China

Year

BP Statist ical Review of World Energy, June 201 1; Ministry of Land and Resources of China.

World

China

RESERVE TO PRODUCTON RATIO FOR

FOSSIL ENERGY IN WORLD AND CHINA


No.3





CPIC2012

0

1000

2000

3000

4000

5000

6000

7000

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 2 0

2 0 3 0

2 0 4 0

2 0 5 0

Coal

Oil

NG

Mtce

Coal-dominated energy consumption

National Bureau of Statistics; Research of Medium and Long-term (2030, 2050)

Energy Development Strategies in China,CAE

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Other fuels

coal

natural gas

oil

Other

fuels

Consumption in 2011:34800

CHINA’S PRIMARY ENERGY CONSUMPTION


No.4





CPIC2012

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

0

100200

300

400

500

600

700

800

2005 2006 2007 2008 2009 2010 2011 2015E 2020E 2025E

Mt Output Consumption Foreign dependency

SUPPLY/DEMAND OF CRUDE OIL IN CHINA

• China has become net oilimporter since 1993

• Import increased year by

year, accounting for 56%

of total consumption in

2011

• Import of crude oil w ill be

more than 400Mt/a by2020-2030

Oil and chemicals: highly dependent on imports

0

1000

2000

3000

4000

5000

60007000

8000

2005 2006 2007 2008 2009 2010 2011PE PP PX SM MEG

kt TYPICAL CHEMICALS HIGHLY DEPENDENT ON IMPORTS


No.5





CPIC2012

Technology improvement of coal to chemicals

Technology Technical maturity in China

Coal coking Mature

Coal gasification Mature

Coal-to-methanol Mature

Coal-to-ammonia Mature

Two-step process for DME Mature

Coal-to-olefins Successful commercial demonstration

Coal direct liquefaction Successful commercial demonstration

Coal indirect liquefaction Successful commercial demonstration

Coal-to-MEG Successful commercial demonstration

Coal-to-natural gas Commercial demonstration


No.6





CPIC2012


Abundant coal reserves in China Technology breakthrough in coal based

alternative fuels and chemicals

Both the central and local governmentscontinue to promote coal-to-chemicals fordomestic resource use, energy security,economic development and diversification

Coal prices relatively low in major producingregions, making it possible for coal-to-chemicalprojects economically feasible

Low resource reserve of oil and gas in

China

High import dependency on oil and

chemicals(PE, PP, PX, MEG, SM) High international oil prices

Coal

platform

Oilplatform


No.7





CPIC2012




Summary

CONTENTS

No.8





CPIC2012

Syngas

Coke

Crude benzene

Coke oven gas

Gasification

Methanol

Ammonia

SNG

H2 DME

CoalMEG

H2 H2

Coking

Direct l iquefaction

CO

Mixed alcohols

MTO

MTP

MTG

MTA

DME

Formaldehyd

e

Acetic acid

Methanol

gasoline

MTBE

F-T Syn thesis

Diesel

Naphtha

LPG

Coal tar

Traditional

Modern

CaC2 C2H2VCM BDO

VAM

Pathways for coal to chemicals


No.9





CPIC2012

Traditional Modern

Coal to liquids(CTL)

Coal to olefins(CTO)

Coal to synthetic

natural gas(CTG)

Coal to glycol(Coal

to MEG)

Coal to dimethyl

ether(Coal to DME)

Ammonia/urea

Acetic acid

Formaldehyde

Acetylene

derivatives(VCM,

VAM, BDO)

Modern coal-to-chemicals in China

In 2009, the State Council issued The Rest ruct uring and Revit alizat ion Plan

of t he Petrochemical Indust ry , w hich listed five modern coal to chemicals as

demonstration projects, namely CTL, CTO, CTG, coal to MEG and coal to

DME.


No.10





CPIC2012Source : CNCIC

Modern coal-to-chemicals projects in China

Tongliao GEM

Coal-to-MEG 150kt /a

Datang Duolun,

MTP 460kt/a

Zhongyuan PCSMTO 200Kt/a

Shenhua Baotou,

DMTO 600kt/a

Shenhua Ningxia CoalIndustry, MTP

500kt/a

Shenhua Ordos ,

CTL 1.08Mt/a,

180kt/a

Yitai Ordos ,

CTL 160kt/a

Sanxi Lu’an Group,

CTL 160kt/a

Coal to MEG(2,350kt/a)

CTL(4,1580kt/a)

CTO(4, 1765kt/a)Xinxiang Yongjin Chemical

Coal-to-MEG 200kt /a


No.11

中化信息中心





CPIC2012

Coal to olefins

Coal

Coal

gasification

Syngas

Purification

Syngas to

Methanol

MTO

Olefinseparation

MTP

Olefin

derivative

preparation

Commercial

demonstration

Commercial

technologies

Commercial

technologies

DMTO

SMTO

MTO/OCP

Converting coal to olefins involves the following major steps:


MTO•1st generation:

DMTO(DICP/SYN/LPEC), SMTO (Sinopec)

•New generation:

DMTO-II, MTO/OCP(UOP/Hydro-Total/UOP)

MTP

• Major licensor(s): Lurgi

No.12

methanol to olefins






CPIC2012

Shenhua Baotou 600kt/a DMTO project

GE Davy

Dow

Univation

LummusOlefins

600kt/aSyngas

Methanol

1800kt/a

PE

300k/a

PP

300k/a

Ethylene

Propylene

Coal

DMTO

DICP/SYN/LPEC

• Approved by NDRC in Dec., 2006; construct ion completed in May, 2010

• Made successful t rial run in Aug., 2010 and entered into commercial operat ion stagein Jan., 2011

• Output of polyolef ins was 500kt, prof it reached RMB 970 million in 2011

Coal to olefins


No.13


http://www.nipic.com/show/4/79/c4e6e53db0966eb2.html





CPIC2012

Potential CTO projects

Coal to olefins

At least 10 addit ional CTO (MTO) plants are projected to come onstream in China by 2015 and will provide 6Mt/a olefins.

Part of the potential projects:

• Zhejiang Nibo Heyuan, 600kt /a, DMTO, 2012 , methanol purchased

• Shaanxi Pucheng Clean Energy Chemical, 670 kt/a, DMTO-II, 2014

• Shaanxi Yanchang/ChinaCoal Yulin Energy Chemical, 600kt /a,DMTO

• Wison (Nanjing) Clean Energy Co., Ltd. OXO plant, 295 kt/a MTO/OCP

• Shenhua Ningxia Coal Industry Group, 500kt/a, MTP, 2014

• Total/ China Power Investment Group, 800kt /a, MTO/OCP

• Sinopec(4)

Zhong’an united coal industry, 600kt/a, SMTO

There are more than 30 CTO(MTO) projects under construction or

planned in China today, with total olefin capacity of over 20 million

tons annually.


No.14






CPIC2012

Coal to MEG

The coal-to-MEG technology in China is still at the stage of furtherdevelopment and improvement. It will still take some time to achieve

commercial operation.

Projects under construction

• Tongliao GEM and Henan Coal Chemical Industry jointly set up HenanYongjin Chemical Ltd to construct coal-to-MEG projects.

• Yongjin started construct ion of 5 projects each w ith a capacity of 200kt /ain Anyang, Puyang, Xinxiang, Yongxin and Luoyang in 2010.

• The project in Xinxiang, Henan was started up in March 2012.

About the demonstration project

• The first commercial demonstration plant, w ith acapacity of 200kt/a(8 ×25), was started up by TongliaoGEM in 2009.

• In light of problems exposed in the trial run of the

project, the company optimized the product line to 150kt/a ethylene glycol and 100kt /a oxalic acid.

• Through continuous improvement, its daily output hasbeen gradually enhanced to around 75% of its designcapacity now.

• Net profit in 2011 was RMB -139.36 million.


No.15

中国化工信息中心 CNCIC C lti





CPIC2012

Coal to MEG

• As huge gap between supply

and demand and cost

advantages exist , it’s expected

that once the demonstration

projects are proven successful,

large capacity of coal to MEG

w ill come on stream in China.• There are many planned coal-to-

MEG projects and the total

capacity is more than 3Mt/a.

Syngas Dimethyl

OxalateCoal Reduction

Ethylene

glycol

Hydrogen

Coal

gasification

Syngas

Conversion

TECHNOLOGICAL ROUTE OF COAL TO MEG

10.12 12.56 17.88 19.5 20.35 22.71 28

40 40.61

48.0252.16

58.2866.44

72.7

0

20

40

60

80

100

120

2005 2006 2007 2008 2009 2010 2011

Import Output

Mt

Source : CNCIC

SUPPLY/DEMAND OF MEG IN CHINA


No.16

中国化工信息中心 CNCIC C lti





CPIC2012

Coal to MEG

R&D on technologies of coal to MEG is active in China, some technologies have

been adopted in pilot or commercial facilities.

Techs

Technologies

at

commercial

stage

Tongliao GEM, Danhua Chemical Tech, FJIRSM of CAS

Technologies

at lab or

pilot plant

stage

Shanghai Wuzheng Engineering Tech

Tianjin University

Wuhuan , Hubei Research Institute of Chemistry

East China University of Technology, Pujing Chemical Industry (Shanghai)

Japan's Ube Kosan, Japan’s High Chemistry, East China Energy and Tech

Shanghai Huayi Group, Shanghai Coking

Sinopec Shanghai Research Institute of Petrochemical Technology


No.17

中国化工信息中心 CNCIC Consulting





CPIC2012

Coal to Liquids

Both the direct and indirect demonstration units of CTL have proven

successful in China(realized steady & long term operation)

Directliquefaction

ShenhuaOrdos,

1.08Mt/a

Indirectliquefaction

ShenhuaOrdos,

180kt/a

Yitai, Ordos,

160kt/a

Lu’an,Changzhi,160kt/a

MTG

Jinmei,Jincheng,

100kt/a

Hydrogenationof coal tar

Shanxi CoalIndustry,

500kt/a+

120kt/a

ChinacoalHeimeilonghu

a, 50kt/a

YunnanJiehua, 10kt/a

Started up: Mar., 27,2008

Data in 2011:Capacity:160-180kt/a

Run t ime:328days

Oil output:151.8kt

Net profit in Q3 & Q4:

RMB27.5M

Started up:Dec., 30,2008

Data in 2011:Run time:280days

Oil output:750kt

Profit: RMB400M

Products: diesel, naphtha, LPG Products: Gasoline

Products: diesel, naphtha, LPG


No.18






CPIC2012

Coal to Liquids

Company LocationCapacity/

(Mt/a)Products

Investment/

USD billionShenhua Ningmei

Group

Ningdong,

Ningxia4

Diesel, naphtha,

LPG8.7

Yankuang Shaanxi

Futrue Energy

Chemical Co., Ltd.

Yulin, Shanxi 1Diesel, naphtha,

LPG2.4

Lu’an Group Changzhi, Shanxi 0.5Diesel, naphtha,

LPG

Comprehensive

utilization project

Yi’tai GroupGanquanpu or

Yili, Xinjiang5.4

Diesel, naphtha,

LPG10.3

Total 10.9

CTL PROJECTS LIKELY TO START CONSTRUCTION DURING 12 th FYP PERIOD

Capacity threshold for a new project in China: > 1Mt/a.


No.19




中国化工信息中心China National Chemical Information Center

CNCIC Consulting

CPIC2012

CTG projects are still in the commercial demonstration stage in China.

Coal to SNG

Source : CNCIC

Datang fuxin,

CTG 4 bnNm3 /PhaseⅠ 1.34bn

Nm3

China Kingho Energy Yili,

CTG 5.5 bnNm3/PhaseⅠ

1.375bn Nm3

Huineng Ordors,

CTG 1.6 bnNm3

Huaneng Hulun Buir ,

CTG 4 bnNm3

Datang Chifeng,

CTG 4 bn Nm3/PhaseⅠ

1.34bnNm3

• Approved projects by NDRC(5)

19.1BnNm3/a

• Planned projects inXinjiang(20):76.7BnNm3/a

• Planned projects in China(40):

>160BnNm3/a

• Capacity expected to reach 25-

30BnNm3/a by 2015 in China

CTG PROJECTS APPROVED BY NDRC


No.20





CPIC2012

Coal to SNG

0

1000

2000

3000

4000

5000

6000

2006 2007 2008 2009 2010 2011 2015E2020E2030E

output Consumption

108Nm3

• China’s natural gas market grow th

pattern has changed from supply

driven to demand driven.

• With the development of SNG and

unconventional NG and the

completion of increasing receipt

stations and NG pipelines, the NGconsumption w ill grow rapidly.

NG

34%

SNG

29%

unconventio

nal NG

37%

PRODUCT STRUCTURE OF NG

IN 2020

NG

67%

SNG

18%

unconventi

onal NG

15%

PRODUCT STRUCTURE OF NG

IN 2015

Source : PetroChina, China National Energy Bureau, CNCIC

• SNG and unconventional

NG w ill play an

important role in China’s

NG output

SUPPLY/DEMAND BALANCE OF NG IN CHINA


No.21





CPIC2012 No.22




Summary

CONTENTS





CPIC2012

Huge capital

investment• 600kt/a CTO:

RMB 18 Bn• 4Mt/a CTL: RMB

55 Bn

• 4BnNm3 CTG:

>RMB 20 Bn

• 200kt/a EG :>RMB 2 Bn

High water

consumption• CTO: 33t/t

• CTL: 13t/t

• CTG: 6.58t/kNm3

• EG:14t/t

High coal

consumption• CTO: 6.68t/t

• CTL: 4.39t/t

• CTG: 2.83t/kNm3

• EG:2.55t/t

High

CO2emission• CTO: 5.5t/t

• CTL: 5t/t

• CTG: 2.5t/kNm3

• EG:2t/t

Problems existing in the development of modern coal to chemicals

Features of modern coal to chemicals : heavy capital investment, high

consumption of resources and large amount of pollutant emission.

Problems, risks & industrial policies

No.23


h l h l fCNCIC Consulting




CPIC2012

Reverse distribution between coal resources and the level of economic

development as well as water resources.



No.24


Chi N ti l Ch i l I f ti C tCNCIC Consulting



China National Chemical Information Centerg

CPIC2012

• On water resource consumption, nat ional policies prohibit using

residential and agricultural water for coal-to-chemicals , restrict CTG and

CTL projects in regions with water scarcity, and prohibit coal-to-

chemicals in regions w here water consumption has reached quota limit.

Water scarcity in coal-heavy regions and other policies restrict the

development of coal-to-chemicals

• On environmental protection, policies

prohibit coal-to-chemicals in regions

w here industrial impact exceeds

environmental tolerance, and require

the rejection of projects that fail to

meet environmental standards on

emissions and wastewater t reatment.

• On location selection, policies limit

coal-to-chemicals in regions that

import coal w hile promoting projects in

regions w ith suff icient water and coal

resources.

Source :CICC

DISTRIBUTION OF COAL RESERVE ANDWATER RESOURCES IN CHINA



No.25






CPIC2012

Risks

Technology risks—still at the stage of gaining experience

• CTL: Technical support system has not fully developed, capacity enlarging risks

• CTG: no commercial operating experience yet

• EG: catalyst activity, yield of EG, stability of equipments

Market risks• Availability of cheap coal always?

• Competition of low-cost products from Middle East and oil-based products: EG, polyolefins

• Overcapacity: Ex. Methanol

• Transportation: EG, SNG

Policy risks

• Carbon tax(CCS implemented, cost 15% higher in the case of CTL), environment tax, waterresource fee, ecological compensation tax for resource development in western areas

• Local governments aggressively launching commercial projects, which will increasinglyconflict with national policies on emissions and water, leading to potential projectcancellations


No.26






CPIC2012

National policies on coal-to-chemicals are becoming increasingly cautionary

Since 2006, the government has issued a number of restrictive policies

on coal-to-chemicals .

• In 2006, t he Not ice on Strengthening the Management of coal-to-

chem icals Indust ry and Facilit ating it s Healthy Development , which

prohibited approval of projects w ith annual product ion of less than 3

million tons for CTL, 1 million tons for CTM and coal-to-DME, and

less than 0.6 million tons for CTO.• In August 2008, the Notice on Strengt hening the Management of

CTL Project s stopped all CTL projects other than the Shenhua Direct

Liquefaction.

• In 2011, the Notice on Regulating coal-to-chemicals Industry f or

Orderly Development prohibits approval of coal-to-glycol projects

under 0.2 million tons of annual capacity and CTG projects under 2

billion cubic meters annual production.

• Development Plan for Demonst ration Project s of coal-to-chem icals

issued by NEA in May, 2012, which points out main tasks in 12 th

FYP period w ill be Upgrades, Demonstration & Volume Cap


No.27





China National Chemical Information Center

CPIC2012

Development Plan for Demonst ration Project s of coal-to-chemicals

• 15 significant demonstration projects w ill be approved in 7 sectors including

CTL, CTG, CTO, CTMEG, coal to ammonia(1Mt/a ammonia for one single unit) ,low rank coal upgrading and CTA in 12 th FYP period.

• These projects w ill be located in 9 provinces, including Xinjiang(4), Inner

Mongolia(3), Shaanxi(2), Shanxi, Ningxia, Anhui, Yunnan, Guizhou and Henan.

• Among these projects, 7 are CTG projects, 4 are CTO, 2 are CTL(indirect).

• Projects in Xinjiang and Inner Mongolia w ill be submit ted for approval in

packages ‘ in the mode of parks or bases’ other than the previous ‘one by onemode’.

CTL indirect CTG CTO Ammonia CTMEG

Low Rank

CoalUpgrading

Min. energy

conversion efficiency

42% 52% 35% 42% 25% 75%

Max. coal

consumption(tce)

4t/t 2.3t/KNm3 5.7t/t 1.5t/t 2.4t/t

Max. fresh water

consumption

11t/t 6.9t/KNm3 22t/t 6t/t 9.6t/t 0.15t/tce

TECHNICAL STANDARD ON DEMONSTRATION PROJECTS OF COAL TO CHEMICAL


No.28






CPIC2012




Summary

CONTENTS

No.29






CPIC2012

National policies on coal-to-chemicals have become increasingly

cautionary, the industry w ill be at the stage of Upgrade, Demonst rat ion

& Volume Cap in the next few years.

Summary

China is the world’s leading country in several new coal to chemical

sectors. The industry has features of heavy capital investment, high

consumption of coal and water, high emission of pollutants. Many

technologies have been adopted for the first time in China, there is

almost no ready-made experience to draw on.

Rising price of coal, logistics cost to major consumer markets, levy

of carbon tax etc., will all lead to higher cost of the products, the

release of massive capacit ies and the low cost cargos from middle

east, w ill have an impact on the economics of the projects.

No.30





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coal to chemical in china

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