Shenhua Coal Conversion Technology

and Industry Development

Yuzhuo Zhang
Shenhua Group Corporation Ltd.,
China
Outline
1. Present status of Chinas energy
production and consumption
2. Shenhuas strategies for coal
conversion
3. Development of Shenhua coal
conversion projects
4. Research and development of Shenhua
coal conversion technology
5. Conclusion
1. Present status of Chinas energy
production and consumption
Coal as the main energy source
Demand for high quality energy increases
quickly
Oil import dependency increases
Environmental problems caused by
energy consumption become more and
more severe
1.1 Coal as the main energy
China has rich coal resources.
Chinas conventional energy reserves higher
than 823 billion tce.
Chinese per capita energy resources only about
51% of the world average.
Energy Reserves Mix
Natural
Gas
0.3%
Raw Coal
87.4%
Hydropower
9.5%
Crude Oil
2.8%
Exploitation Energy Mix
Crude Oil
3.4%
Natural
Gas
1.3%
Hydropower
36.5%
Raw Coal
58.8%
Chinas Gross Energy Production and Energy
Mix in Recent Years
Raw Coal Crude Oil
Natural
Gas
Hydropo
wer
1980 637.4 69.4 23.8 3 3.8
1990 1039.2 74.2 19 2 4.8
1995 1290.3 75.3 16.6 1.9 6.2
1996 1326.2 75.2 17 2 5.8
1997 1324.1 74.1 17.3 2.1 6.5
1998 1242.5 71.9 18.5 2.5 7.1
1999 1091.3 68.3 21 3.1 7.6
2000 1069.9 66.6 21.8 3.4 8.2
2001 1209.0 68.6 19.4 3.3 8.7
2002 1383.7 71.2 17.3 3.1 8.4
2003 1603.0 74.2 15.2 2.9 7.7
Year
Energy Mix ( ) Energy
Production
(Mtec)
1.1 Coal as the main energy
Coal consumption in 2004 was 1.87 billion tons.
The coal dominant energy mix will not change for a
considerable long period of time.
It is estimated that coal will take a 60% share in 2010
and no less than 50% in 2050, still in the prime position.
2003'Energy Consumption Mix
Natural
Gas
2.8%
Crude Oil
22.7%
Hydropower
7.4%
Raw Coal
67.1%
1.1 Coal as the main energy
1.2 Demand for high quality
energy increases quickly
Tendency of China's energy consumption increase
-10
-5
0
5
10
15
20
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year

G
r
o
w
t
h

r
a
t
e

Energy Raw coal Crude oil Power

From 1990 to 2004:
Average annual increase of primary energy
consumption about 4.7% in China
Average annual increase of coal consumption
lower than 3.5%
Average annual increase of oil consumption
higher than 7.3%
Average annual increase of electric power
consumption up to 8.8%
1.2 Demand for high quality
energy increases quickly
China became a net oil import country in 1993.
Oil product is 175 million tons, consumption up to
290 million tons, oil import up to 120 million tons,
and dependency on import up to 38% in 2004.
1.3 Oil import dependency increases
Oil Production and Consumption in China
-50.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
M
t
Production Consumption Import
Prediction:
To 2010, the gap will be up to 150 million tons,
and Chinas oil import dependency will rise to
40%.
To 2020, Chinas oil consumption will be no less
than 450 million tons, and oil import dependency
will possibly reach between 60% and 62%.
1.3 Oil import dependency increases
Increasing of energy consumption, especially the
primary energy consumption, increases CO
2
emissions
inevitably
1.4 Environmental problems caused by energy
consumption become more and more severe
1999 2000 2001 2002 2003
Industry Gas (billion Nm
3
) 12681 13814 16086 17526 19891
SO
2
(Mt) 18.57 19.95 19.48 19.27 21.59
Dust (Mt) 11.59 11.65 10.7 10.12 10.48
Emissions of China's leading pollution in recent years
Item
Year
The direct coal combustion is of low efficiency and heavy
pollution. The economic loss caused by SO
2
pollution and
acidic rain due to burning coal is more than 100 billion RMB.
Environmental problems caused by coal combustion.
85
60
74
70
0
10
20
30
40
50
60
70
80
90
100
CO2 SO2 NOx TSP
w
t
%
1.4 Environmental problems caused by energy
consumption become more and more severe
2. Shenhuas Strategy for Coal Conversion
A state-owned enterprise established in 1995, a key
energy-based company in China
Headquarters in Beijing
A state-owned enterprise established in 1995, a key
energy-based company in China
Headquarters in Beijing
An energy-based company integrating coal mining, power
generation, railway, port and shipping, and becoming a
cross-regional, multi-industrial and diversified energy giant.
The largest coal producing company in China and ranks
No. 3 in the world
An energy An energy- -based company integrating coal mining, power based company integrating coal mining, power
generation, railway, port and shipping, and becoming a generation, railway, port and shipping, and becoming a
cross cross- -regional, multi regional, multi- -industrial and diversified energy giant. industrial and diversified energy giant.
The largest coal producing company in China and ranks The largest coal producing company in China and ranks
No. 3 in the world No. 3 in the world
Shenhuas Coal Production
and Sales during 1997-2004
Shenhua
Shenhua

s Coal Production
s Coal Production
and Sales during 1997
and Sales during 1997
-
-
2004
2004
5.66
13.75
18.4
37.54
52.74
77.33
121.1
133.88
101.97
7.37
14.69
20.42
38.59
56.02
77.73
101.43
0
20
40
60
80
100
120
140
160
1997 1998 1999 2000 2001 2002 2003 2004
year
M
t
Production
Sales
2. Shenhuas Strategy for Coal Conversion
Shenhua assumes the mission of developing the Shenfu-Dongsheng
coalfield, which has proven coal reserves covering an area of 31200 km2 and
geologic reserves of 223.6 billion tons, ranking No.8 in the world;
Chemical feedstock coal and steam coal with low ash, low sulfur, low
phosphorous, high heat value, high activity;
High quality coal for gasification
- low ash fusion point,low ash and high reactivity
- suitable for slagging gasifier
- suitable for large capacity entrained-bed gasifier
- suitable for Texaco, Shell, GSP gasifiers
- low oxygen consumption, low coal consumption and good
comprehensive technical indices
In the light of Shenhua coal characteristics, to develop the coal conversion
industry by utilizing the advanced coal gasification technology is Shenhuas
strategic focus.
Shenhua coal resources and its characteristics Shenhua coal resources and its characteristics
2. Shenhuas Strategy for Coal Conversion
Shenhuas Electric Power
Production during 1997-2004
1.7 3.3 3.4
122.8
202.0
238.6
271.75
424.7
0
50
100
150
200
250
300
350
400
450
1997 1998 1999 2000 2001 2002 2003 2004
year
1
0
9


k
w
h
2. Shenhuas Strategy for Coal Conversion

China Shenhua
Coal Liquefaction
Corporation

Coal Liquefaction &

Coal Chemicals Dept.

Coal Liquefaction
R&D Center

Shenhua Group

Direct Liquefaction

Indirect Liquefaction

Coal Chemicals

Coal -Based
Polygeneration
2. Shenhuas Strategy for Coal Conversion
Headquarters
In Beijing
Coal Chemicals
In Baotou
Coal Tar
In Wuhai
Indirect Coal Liquefaction In
Dabaodang
Direct Coal Liquefaction
In Majiata
Production Capacity: 6 Mt/a
First Phase: 3 Mt/a
Methanol: 1.8 Mt/a
MTO: 600 Kt/a
Production Capacity: 200 Kt/a Production Capacity: 200 Kt/a
Coal Chemicals
In Yulin
Methanol: 3.0 Mt/a
MTO: 1.0 Mt/a
Production Capacity: 6 Mt/a
First Phase: 3 Mt/a
First Train : 1 Mt/a First Train : 1 Mt/a
2. Shenhuas Strategy for Coal Conversion
Coal Liquefaction
10 10 Mt Mt
30 30 Mt Mt
Electric Power Electric Power
20,000 20,000 MW MW
40,000 40,000 MW MW
Coal Production
200 Mt
300 Mt
Coal Coal Production
200 200 Mt Mt
300 300 Mt Mt
2010 2010
2020 2020

Shenhua Group

Coal Coal

Electricity Electricity

Oil & Chemicals Oil & Chemicals

Financing Financing
2. Shenhuas Strategy for Coal Conversion
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project

Residue Residue
Jet fuel Jet fuel
Diesel Oil Diesel Oil
Gasoline Gasoline
Gas Gas
Coal Coal
Air Air
Recycle solvent Recycle solvent Catalyst Catalyst
H H
2 2
N N
2 2
O O
2 2
Gasification Gasification
Liquefaction Liquefaction Separation Separation
Fractionation Fractionation
Coal Coal
Preparation Preparation
Air Separation Air Separation
Slurry preparation Slurry preparation
Purification Purification
Upgrading Upgrading
Direct coal liquefaction is actually a process of coal hydrogenation
at high temperature and high pressure with the action of catalyst.
Use of Shenhua direct coal liquefaction process.
Main Production Units
Catalyst Preparation Catalyst Preparation
Coal Liquefaction Coal Liquefaction
Solvent Hydrogenation Solvent Hydrogenation
Hydro Hydro- -cracking cracking
Light Light- -ends Recover & ends Recover &
De De- -sulfur sulfur
Coal Preparation Coal Preparation
Hydrogen production Hydrogen production
ASU ASU
Sulfur Recovery Sulfur Recovery
Sour Water Stripping Sour Water Stripping
Shenhua Direct Coal Liquefaction Project
3. Development of Shenhua coal
conversion projects
Product Scheme
Product t/a Product t/a
LPG 70,000 LPG 70,000
Naphtha 320,900 Naphtha 320,900
Diesel Oil 620,800 Diesel Oil 620,800
Liquid Ammonia 11,500 Liquid Ammonia 11,500
Sulfur 40,600 Sulfur 40,600
Phenol 3,500 Phenol 3,500
Total 1,067,300 Total 1,067,300
Shenhua Direct Coal Liquefaction Project
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
The Shenhua direct coal liquefaction project has the following
characteristics:
Oversized equipment
Feed coal throughput of the first train 6,000 t/d
Coal based hydrogen production capacity 240,000 Nm
3
/h
Advanced coal liquefaction process, mild reaction and operating
conditions:
Operating pressure 18MPa
Operating temperature 445455
New and high-efficiency coal liquefaction catalyst
The optimized integration of advanced and mature unit processes
and technologies has reduced project risks and enhanced the
operation reliability and economics.
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
Site Construction
Commencement Ceremony
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
Site Leveling
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
Main Road to the Site Area
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
Construction site
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
Construction site
3. Development of Shenhua coal
conversion projects
Shenhua Direct Coal Liquefaction Project
Reactors Fabrication Site
3. Development of Shenhua coal
conversion projects
The first train is 1 Mt/a liquids and it will
be put into operation in 2007.
Shenhua Direct Coal Liquefaction Project
3. Development of Shenhua coal
conversion projects
Shenhua Indirect Coal Liquefaction Project

F F
- -
T T

Wax Wax
Naphtha Naphtha
Fuel Fuel

Coal Coal

Air Air
LPG LPG

Chemicals Chemicals
Coal Coal
Preparation Preparation
Air Air
Separation Separation
Coal Coal
Gasification Gasification
Separation Separation
Diesel Oil Diesel Oil
Purification Purification
F F- -T T
Synthesis Synthesis
The technology of indirect coal liquefaction is that: the coal is
gasified into syngas, which is further synthesized into fuel oil and
chemicals. The core technology of the indirect coal liquefaction is
F-T synthesis . .
3. Development of Shenhua coal
conversion projects
Shenhua Indirect Coal Liquefaction Project
F-T synthetic products include:
Oil phase product:
including oils and paraffin wax.
Gas phase product:
CO, H
2
, methane and light hydrocarbon.
Water phase product:
water and oxygen-contained organic.
3. Development of Shenhua coal
conversion projects
Shenhua Indirect Coal Liquefaction Project
Key technology scheme primarily adopt the integration
of advanced and matured coal gasification and
advanced F-T synthesis technologies.
Product slate will consider the combination of oil
products and chemical products.
At present, projects comparison and selection of
different technology routes and feasibility study are
undertaking.
3. Development of Shenhua coal
conversion projects
Shenhua Coal Chemical Industry Project
Two Shenhua large coal chemical projects:
One is a mega coal chemical project, located in
Baotou, Inner Mongolia, supported by Erdos
coalfield
Another is located in Yulin, Shaanxi, supported by
Yulin Shenfu coalfield.
3. Development of Shenhua coal
conversion projects
Shenhua Coal Chemical Industry Project

Propylene Propylene
Ethylene Ethylene
Electricity Electricity

Coal Coal

Air Air
Recycle Gas Recycle Gas

MTO
Methanol Methanol
Coal Coal
Preparation Preparation
Air Air
Separation Separation
Gasification Gasification
Power Generation Power Generation
Purification Purification
Separation Separation
MTO MTO
Synthesis Synthesis
Methanol Methanol
Synthesis Synthesis
Key technology is coal to olefin, combination of coal
to methanol and methanol to olefin.
3. Development of Shenhua coal
conversion projects
Shenhua Coal Chemicals Project
Scale of Scale of Baotou Baotou coal chemicals project: coal chemicals project:
Methanol 1.8Mt/a Methanol 1.8Mt/a
Ethylene 300kt/a Ethylene 300kt/a
Propylene 300kt/a Propylene 300kt/a
Having finished evaluation of feasibility study report, Having finished evaluation of feasibility study report,
and in the stage of project engineering technology and in the stage of project engineering technology
selection and inviting public bidding. selection and inviting public bidding.
The plant will be put into operation in 2008. The plant will be put into operation in 2008.
3. Development of Shenhua coal
conversion projects
Shenhua Coal Chemicals Project
Scale of Scale of Yulin Yulin coal chemicals project coal chemicals project
Methanol 3.0Mt/a Methanol 3.0Mt/a
Ethlene Ethlene 500kt/a 500kt/a
Propylene 500kt/a Propylene 500kt/a
This project is in the stage of technology selection This project is in the stage of technology selection
and comparison and project and comparison and project feasibility study study
3. Development of Shenhua coal
conversion projects
4. Research and development of Shenhua
coal conversion technology

Shenhua Group Shenhua Group

Coal Mining
Research Center

Coal Mining Coal Mining
Research Center Research Center

Power
Research Center

Power Power
Research Center Research Center

Coal Liquefaction
Research Center

Coal Liquefaction Coal Liquefaction
Research Center Research Center

Direct Coal
Liquefaction

Indirect Coal
Liquefaction

Coal Chemicals

Coal -Based
Polygeneration

Coal Liquefaction Coal Liquefaction

Research Center Research Center

International
Cooperation

International International
Cooperation Cooperation

Domestic
Cooperation

Domestic Domestic
Cooperation Cooperation

Coal Liquefaction
Research Center Corp. Ltd

Coal Liquefaction Coal Liquefaction

Research Center Corp. Ltd Research Center Corp. Ltd

Coal
Resources

Indirect
Liquefaction

Coal
Gasification

Coal -Based
Polygeneration

Coal
Chemicals

Direct
Liquefaction

Coal to
Hydrogen
4. Research and development of Shenhua
coal conversion technology
PDU Base of Shenhua Coal Liquefaction
Research Center
PDU Base of Shenhua Coal Liquefaction PDU Base of Shenhua Coal Liquefaction
Research Center Research Center
4. Research and development of Shenhua
coal conversion technology
Technical development to support Shenhua DCL project:
Development of a new type of coal liquefaction process
Development of a new type of catalyst with high efficiency
Coal petrographic study for liquefaction
Study on basic physical properties of DCL
Study on effluent water treatment of DCL
Study on comprehensive utilization of coal liquefaction residue
Studies on key equipment for coal treatment, coal slurry preparation,
liquefaction reactor, coal slurry feed pump and recycle pump, coal liquefied
oil processing
Study on influences of coal liquefaction on the regional environment,
economics and community.
4. Research and development of Shenhua
coal conversion technology
Combined with Shenhua coal conversion projects, the
following technologies are developed:
F-T synthesis technology
Configuration, design, processing and manufacture technologies
of synthesis reactor
F-T synthesis catalyst technology and catalyst-wax separation;
System integration and control and operation technology of
large-scale coal chemical system;
Deep processing technology of coal liquefaction product
Technology of large-scale coal gasification, coal to hydrogen,
coal-based poly-generation.
4. Research and development of Shenhua
coal conversion technology
Shenhua coal conversion projects are mainly built in
the west of China, where it has ample environmental
capability, yet with weakly defendable environment.
At the same time, Shenhua group pays more
attention to construction of ecological environment.
Shenhua will study the influences of project
construction on local communities and surrounding
areas, resources, economy and ecological environment.
4. Research and development of Shenhua
coal conversion technology
The results of technical and economical analysis of
domestic researchers for different coal conversion
processes show:
direct coal liquefaction technology has an energy
efficiency of about 60%;
about 14~18% higher than other coal conversion
technologies;
with the best environmental effects , such as CO
2
emission; the lowest resources consumption and the
lowest investment for per unit product.
4. Research and development of Shenhua
coal conversion technology
High Temp. Low Temp
Efficiency % 59.75 41.56 41.26 45.64
Products
Recovery
%daf 55.15 38.09 43.2 100.35
t/GJ 0.16 0.25 0.26 0.31
t/t 7 11.21 11.96 7.05
Coal use tce/GJ 0.061 0.075 0.076 0.068
RMB/t 7260 9110.07 8414.82 3295.08
RMB/GJ 169.76 200.05 183.01 144.12
RMB/t 1771.06 2191.11 1845.89 1083.97
RMB/GJ 41.41 48.12 40.15 47.41
IRR % 10.16 14.96 9.64 14.53
CO
2
kg-C/GJ 20.09 34.72 35.61 29.22
SO
2
kg/GJ 0.01 0.004 0.004 0.003
NOx kg/GJ 0.09 0.133 0.186 0.17
Dust kg/GJ 0.01 0.01 0.013 0.02
Water kg/GJ 6.87 6.29 6.46 5.58
Residue kg/GJ 3.36 9.92 10.29 8.86
Overall comparison of coal conversion technologies
Economic
Investment
Cost per ton
Environ
Indirect Liqufaction
Methanol
Technical
Resource
use
Water use
Item Unit
Direct
Liqufaction
4. Research and development of Shenhua
coal conversion technology
At present, Shenhua group Ltd. is undertaking
construction of the first large-scale direct coal liquefaction
demonstration project in the world. Advantages and
bright prospects of direct coal liquefaction technology on
investment, environment and efficiency are important
considerations.
4. Research and development of Shenhua
coal conversion technology
Shenhua direct coal liquefaction demonstration project
involves the integration and intercrossing of coal
processing, chemical engineering, petroleum engineering,
mechanical manufacture, material, control, special
engineering thermodynamics calculation, software
engineering etc. Systemic technical optimization and
integration are needed. Once this demonstration project
succeeds, it will give far-reaching effect on coal-to-oil
industry of China and the world.
4. Research and development of Shenhua
coal conversion technology
5Conclusions
With the development of world economy, the imbalanced
oil supply and demand will be intensified. Coal will still
be the best substitute for oil and natural gas.
Clean coal conversion and high-efficiency utilization will
be the approach for future world energy mix
readjustment and guarantee of energy demand of high-
speed economic development.
China is a country with scarce oil but rich coal resources.
Coal liquefaction, coal-to-oil, CCT development and high-
efficiency utilization, maintaining environmental friendly
are the basic national policies to ensure the long-term energy
security.
5Conclusions
Shenhua deeply feels the importance of technical
innovation and equipment to an enterprise. Combining with
the self development, Shenhua will increase the input on
technology R&D and provide support to the processes,
technologies and equipment with good developing prospects
in the area of CCT conversion.We are looking forward to the
extensive cooperation with domestic and foreign partners.
5Conclusions
Thank
you
Thank
you