INSIGHT: China sets scene for chemicals from coal

By Nigel Davis

JOHANNESBURG, South Africa (ICIS news)--It is easy to be too narrowly focused when it comes to thinking about chemicals from coal.

In China, particularly, but also in other coal rich parts of the world, the race is on to build new plants to utilise what is, with oil prices around $70/bbl, a relatively attractive feedstock. Coal is already used successfully to produce liquid fuels using Fischer-Tropsch-based technologies.

But what about coal as the starting point for products like ethylene, propylene, acetic acid and vinyl chloride monomer (VCM), not forgetting ammonia and fertiliser?

There is a strong push now to use coal to make the environmentally-friendly fuel dimethyl ether (DME).

As consultants Tecnon Orbichem said at the APIC petrochemicals gathering this year, the focus of interest has been on methanol made for coal-derived synthesis gas. Distilling methanol in an intermediate step helps eliminate otherwise unwanted impurities.

Potentially, methanol can be converted to a healthily long list of chemicals. The consultants point to 14 methanol-to-olefins (MTO) projects planned for China alone.

Dow is looking at a project with Shenshua, China’s largest coal producers, to convert coal to olefins at Yulin in Shaanxi province in China. Nearby salt makes chlorine production a possibility.

The world leader in coal-to-liquids (CTL) technology, South Africa’s Sasol, has completed a pre-feasibility study for two 80,000 bbl/day CTL projects, one with Shenshua, the other with Ningxia Coal. Shenshua is also building a plant using Fischer Tropsch technology from Hydrocarbon Technologies.

These plants will be vast, but costly, so the risks are enormous. On the other hand the opportunity to gain a foothold in the world’s fastest growing chemicals market is compelling.

In China, too, there are 14 plants under construction using the Shell Coal Gasification Process, Tecnon Orbichem notes. General Electric Technology will be used to supply syngas to Celanese in China to make acetic acid.

The list goes on as the products become more diverse. Many firms want to modernise the gasification plants serving ammonia units. Bayer will use carbon monoxide made from coal by Linde and Shanghai Coking & Chemical to make phosgene for isocyanates production in Caojing. Tianjin Bohai Chemicals will use syngas to make butanol.

The China PVC from acetylene and coal-based methanol carbonylation route to acetic acid stories are quite well known. In the rush to build new world-scale acetic acid plants using coal-derived methanol, however, China may be heading for over-supply.

The DME development, though, is the most fascinating. DME could be a super fuel given its relatively high oxygen content and easy vaporisation. Technology has moved on such that now DME can be produced directly from synthesis gas made from coal or natural gas rather than from methanol making production more attractive in coal-rich countries.

DME’s use in China will grow in 2006 as new capacity comes on-stream and in a high oil price environment its production and use becomes more attractive. The chemical/fuel and the route to it are not developed yet – but who knows.

China is leading the way in re-introducing a modified coal chemistry to the world. That world watches the county’s coal to chemicals development with interest.