[photopress:Erdos_plant_being_built.jpg,full,alignright]The idea seems remarkable — converting coal to oil. It comes down to cost. If the price of oil is high enough then it is financially viable to do the conversion. Where it will be happening in China is Erdos, in north China’s Inner Mongolia Autonomous Region.
It is happening and soon. Wang Yulong, deputy manager in charge of the coal liquefying arm of the Liquefied CoalOil Company of Shenhua Group Corporation, the country’s top coal producer which is 100% state owned, said, ‘The project is in its final stage of construction and will start production late in the year.’
Coal liquefaction is a process that converts coal from a solid state into liquid fuels, usually to provide substitutes for petroleum products. While crude oil was widely available and inexpensive then the process was not worthwhile. At current oil prices it is viable and will probably become more so in years to come.
The facility in Erdos will produce mostly diesel oil, plus liquefied petroleum gas (LPG), naphtha (a volatile, flammable liquid hydrocarbon mixture), and hydroxybenzene. On completion, it will be the largest facility in the world producing liquids from coal using a technology known as direct gasification.
There is one in South Africa which produces transport fuel from coal but in a different way. No one, in fact, is talking in any detail about the technology being used for the new plant in China.
Listed as a key state project to help deal with China’s petroleum security concerns, the massive Erdos coal liquefaction facility began construction in August 2004. During an inspection tour in June 2006, Chinese Premier Wen Jiabao called the project a major scientific and technological experiment.
With a budget of RMB12.3 billion yuan and an annual production capacity of five million tons of oil, the project will be completed in two stages.
Wang Yulong said, ‘We’re installing the first production line and its infrastructure. On completion, the line will be able to process annually 3.45 million tons of coal into 1.08 million tons of oil, including 720,000 tons of diesel oil.’
The technology was trialed at a specially built converter in Shanghai. Wang Yulong said, ‘The project in Erdos is about 1,000 times the size of the Shanghai model.’ It is claimed that it will be environmentally friendly.
The equation is simple. 3.4 to 3.5 tons of coal can produce a ton of oil. If the price of a barrel of crude is above $35 it is worth doing. Oil prices in the international market currently hover around $70 a barrel. An amazing development and one worth watching closely.
Source: Jongo News
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