Shenhua Group is constructing the world’s largest direct coal liquifaction plant. It’s known as the Shenhua DCL plant. Shenhua is making a giant leap ahead of the U.S. in direct coal liquifaction technology and, ironically, is using direct liquifaction technology that was originally developed in the U.S. The plant is world class and cutting edge – it is reported it will cost about $1.5 billion U.S. dollars and be capable of producing 1 million tons per year of liquid fuel from coal. The fuel will be ultra-clean, sulfur free diesel and gasoline.
The plant converts 7,000 tpd coal and produces 24,000 bpd liquid fuels, naptha and diesel. Shenhua licensed Shell gasification technology and will use two gasifiers in the first phase. Shenhua licensed Headwaters direct coal liquifaction technology. Hydrogen Technology, a subsidiary of Headwaters, is providing the process design and basic engineering.
Hydrogen Technology, Inc. is a U.S. company that developed the technology with the support and the funding of the U.S. Department of Energy. The DOE has supported direct coal liquifaction since the 1970′s energy crisis. This Shenhua DCL plant provides China’s energy needs in an efficient and very clean manner while helping China achieve it’s goal of enery independence. The United States developed the technology, but has not built a plant and continues to rely on imported foreign crude oil.
The plant is involved in start-up and performance testing at this time. Shenhua began the first trial test run on Januay 1, 2009. According to Shenhua chairman, Zhang Xiwu, the tests have been without problems so far and the fuels produced are free from sulfur and would be cleaner than the fuels of the Euro V emission standard.
The price of crude oil has declined and there is on-going debate about the economic viability of the plant with crude oil below $40 per barrel. According to Chairman Zhang the plant is commercially viable with today’s price of crude oil. Chairman Zhang said that it would be best if the price of oil were above $60, but also noted that the feasibility study was completed in 2001 when crude oil traded about $23 per barrel. Mr. Zhang would not disclose the cost of producing a barrel of liquid fuel.
