CTL plants proliferate in China

China is encouraging coal-to-liquid (CTL) projects to reduce the country’s dependence on imported oil and is likely to have a CTL plant running late this year. Although potentially more polluting than alternatives, advocates of coal-derived fuels say they can be clean, provided that carbon capture and storage technology is used to bury emissions from the process. The main projects being developed in China are: a direct coal liquefaction demonstration plant in Inner Mongolia that Shenhua group is building, which is set to start next year. It will produce 1 million tons of liquid petroleum gas, naphtha, diesel fuel and phenol a year, ramping up to 5 million tons in the second phase; a CTL plant at Yulin in Shaanxi that Shenhua Group and Sasol are looking to build using Sasol’s low-temperature Fischer-Tropsch process; a US$5 billion CTL plant in Ningxia to be developed by Shenhua Ningxia Coal Industry, a unit of Shenhua, and Sasol to produce 3 million tons a year of liquid fuels; a US$6 billion plant CTL plant in Ningxia that Royal Dutch Shell and Shenhua Ningxia Coal Industry are developing which will use Shell’s coal gasification technology to produce 70,000 barrels per day of oil and chemical products; a RMB100 billion (US$13.11 billion ) demonstration CTL plant in the Yulin area of Shaanxi that the Yankuang Group is building, which will produce 1 million tons a year of diesel fuel, naphtha, petroleum gas and special wax from 2012; a CTL plant at Tunliu that coal producer Lu’an Group is building to produce 160,000 tons a year of oil products and chemicals from 2008; and an Inner Mongolia CTL plant that the Yitai Group expects to produce 160,000 tons a year from next year. (June 6, 2007)