Localization of coal chemical equipment is now underway

The rising global oil prices have sparked public anticipation for the early completion of coal-to-oil projects in the country. Recently, the world's first coal direct liquefaction demonstration plant—Shenhua Group’s one-million-ton coal direct liquefaction project—has entered the commissioning phase and is expected to begin commercial trial operations in the second half of the year. Industry experts are closely watching the application of the first set of coal direct liquefaction technology, the stability of the equipment, and the localization of key components for future 5-million-ton-scale coal-to-oil plants. This first batch of core equipment was largely imported, as China had no prior experience to follow. While Shenhua developed its own technology, it still relied heavily on foreign suppliers for critical machinery. This reliance, while reducing initial risks, also exposed the project to external control, significantly increasing both investment and operational costs. The project’s total investment has risen from an initial 7.9 billion yuan to 13 billion yuan, with over half of that allocated to equipment procurement, including major imports and spare parts. For instance, the price of a large-thrust hydrogenation reciprocating pump jumped from over $2 million to $3.6 million. A mechanical expert noted that this equipment could be domestically produced for around RMB 10 million, but due to time constraints and the need for success, Shenhua had little choice but to pay the higher price. With 26% of the total 2,860 movable and static devices being imported, and more than 35% of the project cost attributed to imported technology and equipment, the challenge of spare parts supply remains a critical issue. To address these challenges, Shenhua initiated equipment localization efforts as early as 2002, collaborating with Shanghai Electric Group and Sinopec Engineering Construction Company (SEI). Over the past two years, they have made significant progress, including the development of coal slurry pumps, bottom pumps, and high-pressure feed pumps. These innovations have passed expert reviews and even secured national patents. Despite these achievements, obstacles remain in system integration, funding, talent, and material development. Public pilot platforms, essential for testing and scaling up, are still pending due to site selection, infrastructure, and financial issues. Looking ahead, Shenhua plans to build a 3-million-ton coal indirect liquefaction plant in Ningxia, along with several other coal chemical projects. However, the domestic equipment industry is struggling to meet the growing demand for localized key components. To overcome this, experts emphasize the need for a coordinated national effort, increased investment in R&D, and the establishment of public pilot platforms. They suggest strengthening coordination mechanisms, boosting support for independent innovation, promoting the digestion and absorption of imported technologies, and accelerating the creation of a public pilot platform for coal liquefaction equipment. Only through such comprehensive measures can China achieve true self-reliance in coal-to-oil technology.

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