Towering above the sweeping grasslands of Erdos, in North
China's Inner Mongolia Autonomous Region, two 60-meter-high
cylindrical structures stand against the skyline.
The structures - reactors for liquefying coal - are part of a
project to mass-produce desperately needed fuel oils from the
country's rich coal resources.
More than 10,000 workers from across China are constructing the
massive project, the first industrial facility in Ejin Horo
Banner.
"The project is in its final stage of construction and will be
ready for production late in the year," said Wang Yulong, deputy
manager in charge of the coal-liquefying arm of the Liquefied Coal
Oil Company of Shenhua Group Corporation Ltd, the country's top
coal producer.
The facility will produce mostly diesel oil, plus liquefied
petroleum gas (LPG), naphtha (a volatile, flammable liquid
hydrocarbon mixture) and hydroxybenzene.
With a budget of 12.3 billion yuan and an annual production
capacity of five million tons of oil, the project will be completed
in two stages. In the first phase, three production lines will be
installed.
"We're installing the first production line and its
infrastructure," said Wang. "Upon completion, the line will be able
to process annually 3.45 million tons of coal into 1.08 million
tons of oils, including 720,000 tons of diesel oil."
Before starting the project, Shenhua successfully tested the
technology at a specially built converter in Shanghai, according to
Wang.
"The project in Erdos is about 1,000 times the size of the
Shanghai model," said Wang, claiming it would be both
environmentally friendly and lucrative.
Preliminary estimates showed 3.4 to 3.5 tons of coal could
produce a ton of oil, and if the price for a barrel of crude
remained at $35, the facility would be profitable, said Wang.
Industry observers say the Erdos project is significant to
China's food and energy security.
"The efficiency of conventional coal use is very low, but the
profits from coal-oils can be much higher," said an expert surnamed
Wu. "Moreover, grains, such as maize, will be spared from being
processed into ethanol."
(Xinhua News Agency June 22, 2007)