DIRECT LIQUEFACTION PROCESSES

Reason for Discussion of Direct Liquefaction of Coal in Gasifipedia

As the following discussion of Direct Coal Liquefaction (DCL) explains, the fundamental
process approach of DCL does not involve gasification at all. Therefore it would seem to
be entirely out of scope of Gasifipedia. However, the following considerations require that
discussion of DCL be included:

DCL is often compared and contrasted with Indirect Coal Liquefaction (ICL) which
includes feedstock gasification as an intrinsic step. Discussion of DCL must be
included for the sake of this discussion and completeness when covering coal to
liquids technology.

DCL process cycles often include gasification of solid residuals or additional

carbonaceous feedstock to produce hydrogen needed for direct liquefaction
reactions.

Hybrid process approaches involving a combination of direct coal liquefaction and

indirect coal liquefaction (in which gasification is an intrinsic step) have been
proposed and may be increasingly important in new research and development in
coal/biomass to liquids process technology.

Description
Direct coal liquefaction involves contacting coal directly with a catalyst at elevated
temperatures and pressures with added hydrogen (H2), in the presence of a solvent to
form a raw liquid product which is further refined into product liquid fuels. DCL is termed
direct because the coal is transformed into liquid without first being gasified to
form syngas (which can then in turn be transformed into liquid products). The latter two-
step approach, i.e. the coal to syngas to liquids route is termed indirect coal
liquefaction (ICL). Therefore, the DCL process is, in principle, the simpler and more
efficient of the two processes. It does, however, require an external source of H2, which
may have to be provided by gasifying additional coal feed, biomass and/or the heavy
residue produced from the DCL reactor. The DCL process results in a relatively wide
hydrocarbon product range consisting of a variety of molecular weights and forms, with
aromatics dominating. Accordingly, the product requires substantial upgrading to yield
acceptable transportation fuels.

The technology had been demonstrated in Germany during World War II, but at high
cost. Continued development in the United States and other nations, since then, has
focused on reducing its costs, via catalysts, reactor design and process efficiency
improvements. The U.S. Department of Energy (DOE) had a very active coal liquefaction
research program in 1970 into the 1980s in response to the Organization of the
Petroleum Exporting Countries (OPEC) oil embargo of 1973, but the funding has been
greatly reduced since the 1990s when the DOE development for direct coal liquefaction
ended. The DCL technology DOE helped to develop with Hydrocarbon Technologies, Inc.,
HTI (now part of Headwater, Inc.), was licensed to Shenhua Corporation of China in
2002, which built a DCL plant in Erdos, Inner Mongolia (see further description below),
based on Headwaters technology.

Many different processes have been developed for DCL, but most are aligned similarly in
regards to reaction chemistry and the process concept. Common features are the
dissolution of coal into a solvent, followed by the hydrogenation of the coal with H2 over
a catalyst. The process can be very efficient with an overall thermal efficiency in the
range of 65%.

Typical Process Configurations

The DCL process involves adding hydrogen (hydrogenation) to the coal, breaking down
its organic structure into soluble products. The reaction is carried out at elevated
temperature and pressure (e.g., 750 to 850F and 1,000 to 2,500 psia) in the presence
of a solvent. The solvent is used to facilitate coal extraction and the addition of
hydrogen. The solubilized products, consisting mainly of aromatic compounds, then may
be upgraded by conventional petroleum refining techniques such as hydrotreating to
meet final liquid product specifications.

Figure 1 shows a typical block flow diagram of a DCL plant showing a hydrotreating unit
(HTU) immediately downstream of the direct liquefaction reactor, to upgrade the
distillate product as it is being produced. The DCL processes are generally classified into
two main groups: a single-stage versus a two-stage direct liquefaction process.

Figure 1: Simplified DCL Process Scheme

Single-stage Processes
Single stage processes were the first generation DCL technology, developed in the
1960s, and most such programs and facilities have since been superseded or abandoned.
A single-stage process attempts to convert coal to liquids in a single reaction stage. Such
process may include an integrated online hydrotreating reactor to upgrade the distillates,
as shown in Figure 1. Technology developers included:

o H-Coal (HRI, USA)

o Exxon donor solvent (Exxon, USA)

o SRC-1 and II (Gulf Oil, USA)

o Conoco zinc chloride (Conoco, USA)

o Kohleoel (Ruhrkohle, Germany)

o NEDOL (NEDO, Japan)

Two-stage Processes
Most of the two-stage DCL processes were developed in response to the oil embargo in
the early 1970s. Two-stage DCL process was developed in recognizing that the
conversion process probably proceeds in two steps first, coal dissolution, in which the
coal is converted to a soluble form with high molecular weight but with little change in
the average composition from the original coal; and a second stage in which the
dissolved products are upgraded to lower-boiling liquids with reduced heteroatom
content.

Two-stage DCL processes were developed in many different countries, over a period
between 1970 to the 1980s, with different levels of success. Processes and technology
developers included:

o Catalytic two-stage liquefaction (US DOE and HTI, USA)

o Liquid solvent extraction (British Coal Corporation, UK)

o Brown coal liquefaction (NEDO, Japan)

o Consol synthetic fuel (Consol, USA)

o Lummus (Lummus, USA)

o Chevron coal liquefaction (Chevron, USA)

o Kerr-McGee (Kerr-McGee, USA)

o Mitsubishi Solvolysis (Mitsubishi Heavy Industries, Japan)

o Amoco (Amoco, USA)

o Others
Commercial Implementations/Recent Developments
Very few DCL programs were continued beyond the late 1980s. One exception is the HTI
(now Headwater, Inc.,) catalytic two-stage liquefaction process that was funded by DOE.
The technology was licensed to Shenhua Corporation of China in 2002 for the
construction of a 20,000 bpd plant in Inner Mongolia that started demonstration testing
in December 2008. In 2011, Shenhua Group reported that the direct CTL project in
Erdos, Inner Mongolia, with designed fuel production capacity of 1.08 million tonnes per
year of liquid products including diesel oil, liquefied petroleum gas (LPG) and naphtha
(petroleum ether), had been in continuous and stable operations since November of
2010, and that Shenhua had made 800 million yuan ($125.1 million) in earnings before
taxes in the first six months of 2011 on the CTL project. Shenhua noted that it planned
to raise fuel production capacity in Erdos to 3 million tonnes a year by adding another
direct CTL line in the first phase and to 5 million tonnes a year after a second phase is
completed. Additionally, Shenhua noted that it was also planning to start constructing a
56.5 billion yuan, 3 million tonne per year direct CTL project in northwestern Xinjiang in
late 2011.1

Figure 2: Shenhua DCL Plant in Inner Mongolia

In April 2009, an Australian company announced plans to pilot test a novel underground
coal to liquids process involving injecting water with simulated supercritical properties
and an entrained catalyst into deep coal seams. Liquids would then be produced via
established oil drilling and pumping methods.