Abstract

Process Economics Program Report 43E

METHANOL FROM COAL
(December 2006)

It seems probable that coal will regain its importance as a source of energy and chemicals
in light of dwindling petroleum resources and rising prices of natural gas and oil (particularly in
China and the eventually in the U.S). Coal’s exploitable resources have a potential to quench
mankind's thirst for energy (and chemicals) at the current rate five times longer than gas
resources. Proven recoverable coal reserves of about 990 billion metric tons offer a
tremendous source of energy and chemicals for North America, Russia, China, Australia,
India, Germany, and South Africa, each with more than 50 billion metric tons of coal reserves.
The challenge is how to harness this enormous amount of coal resource, which constitutes
about 22% of world energy demand, most economically without unduly impairing the
environment.
Efforts are on-going to improve the techniques for harnessing coal energy. Several design
and operational improvements and innovations are reported to have taken place in commercial
gasification technology. In particular, Shell has made significant recent progress in developing
commercial third generation of gasification technology to produce syngas from coal for
conversion to both ammonia and methanol.
In this report we review entrained bed coal gasification technology using the Shell Coal
Gasification Process (SCGP), integrated with the ICI/Synetix Low Pressure Methanol (LPM)
process for the production of 5,000 MTPD of chemical grade methanol. Economics are then
compared with the economics of producing 5000 metric tons per day of methanol from a
natural gas in the U.S. Gulf Coast.

© SRI Consulting PEP Report 43E

 Report No. 43E

METHANOL FROM COAL

by VICTOR WAN
and
RONALD SMITH

December 2006

A private report by the

PROCESS ECONOM ICS PROGRAM

SRI Menlo Park, California 94025

 SRIC agrees to assign professionally qualified personnel to the preparation of the
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the reports or other deliverables produced by SRIC pursuant to this agreement

For detailed marketing data and information, the reader is referred to one of the SRI
Consulting programs specializing in marketing research. THE CHEMICAL ECONOMICS
HANDBOOK Program covers most major chemicals and chemical products produced in the
United States and the WORLD PETROCHEMICALS PROGRAM covers major hydrocarbons and
their derivatives on a worldwide basis. In addition the SRIC DIRECTORY OF CHEMICAL
PRODUCERS services provide detailed lists of chemical producers by company, product, and
plant for the United States, Western Europe, Canada, and East Asia, South America and Mexico.
 CONTENTS

1 INTRODUCTION ........................................................................................................ 1-1

REPORT FOCUS ....................................................................................................... 1-2

METHANOL FROM COAL ......................................................................................... 1-2

METHANOL SHIPPING ............................................................................................. 1-3

2 SUMMARY ................................................................................................................. 2-1

METHANOL MARKETS ............................................................................................. 2-2

COAL TO METHANOL TECHNOLOGIES ................................................................. 2-4

Coal Preparation......................................................................................................... 2-5

Gasifier Temperature.................................................................................................. 2-5

Oxygen Compression Requirements ......................................................................... 2-6

Gasifier Refractory Design ......................................................................................... 2-6

Gasifier Capacity ........................................................................................................ 2-6

Steam, Fuel and Power Systems ............................................................................... 2-6

Mercury Removal Process ......................................................................................... 2-7

Solids Waste Treatment/Disposal .............................................................................. 2-7

NATURAL GAS TO METHANOL TECHNOLOGIES ................................................. 2-7

COMPETITIVE PRODUCTION ECONOMICS OF COAL TO METHANOL

TECHNOLOGIES ....................................................................................................... 2-9

PROCESS SCHEME.................................................................................................. 2-9

PATENT SUMMARY, DESIGN & COST BASES, AND CITED REFERENCES ....... 2-10

CONCLUSIONS ......................................................................................................... 2-12

3 INDUSTRY STATUS.................................................................................................. 3-1

COAL OVERVIEW ..................................................................................................... 3-1

Coal Resources and Uses.......................................................................................... 3-2

METHANOL FROM COAL ......................................................................................... 3-3

Methanol Overview..................................................................................................... 3-6

© SRI Consulting iii PEP Report 43E

 CONTENTS (Continued)

Methanol Based Chemicals........................................................................................ 3-7

Present Uses of Methanol .................................................................................... 3-8
Methanol Prices.................................................................................................... 3-9
Future Potential Chemical Uses of Methanol....................................................... 3-9
Methanol to Olefins .......................................................................................... 3-10
Acetic Acid ....................................................................................................... 3-10

Methanol as a Fuel and Energy Carrier ..................................................................... 3-12

Current Potential Use of Methanol as a Transportation Fuel............................... 3-12
Dimethyl Ether as a Potential Diesel Fuel Substitute........................................... 3-13
Other Potential Fuel Uses For DME..................................................................... 3-14
Future Potential Uses of Methanol as a Fuel ....................................................... 3-14
Methanol Storage and Distribution ....................................................................... 3-15
Methanol in the Environment................................................................................ 3-15
Climate Change Issues ........................................................................................ 3-16

METHANOL PRODUCTION ...................................................................................... 3-17

Syngas From Natural Gas .......................................................................................... 3-17

Syngas From Autothermal Reforming .................................................................. 3-17
Syngas From Partial Oxidation of Heavy Feedstocks.......................................... 3-17

Syngas From Coal...................................................................................................... 3-18

Methanol Synthesis From Syngas.............................................................................. 3-19

Low Pressure Methanol Synthesis Process......................................................... 3-19
Liquid Phase Technologies .................................................................................. 3-21
Overall Plant Efficiencies...................................................................................... 3-21
Other Emerging Sources of Methanol .................................................................. 3-21

Supply/Demand For Methanol Worldwide.................................................................. 3-22

Methanol Production by Source ................................................................................. 3-23

Future Potential For the Use of Methanol as a Fuel .................................................. 3-24

Methanol For Conventional Fuel Cells ................................................................. 3-25
Direct Methanol Fuel Cells ................................................................................... 3-25

© SRI Consulting iv PEP Report 43E

 CONTENTS (Continued)

Methanol and Climate Change............................................................................. 3-27

Methanol From Carbon Dioxide ........................................................................... 3-28

4 METHANOL FROM COAL ........................................................................................ 4-1

INTRODUCTION ........................................................................................................ 4-1

HISTORICAL PROCESS BACKGROUND ................................................................ 4-1

Coal as a Methanol Production Feedstock ................................................................ 4-2

Historical Development of Coal Gasification .............................................................. 4-3

Historic Development Methanol Synthesis................................................................. 4-7

METHANOL FROM COAL TECHNICAL BACKGROUND......................................... 4-7

Coal Gasification Chemistry ....................................................................................... 4-7

Entrained-Flow Coal Gasifiers.................................................................................... 4-8

GE/Texaco Coal Gasification Process ....................................................................... 4-9

Shell Coal Gasification Process ................................................................................. 4-10

Methanol Synthesis: ICI/Synetix Low Pressure Methanol (LPM) Process................. 4-12

PROCESS DESCRIPTION AND DESIGN................................................................. 4-12

Section 100-Coal Receiving and Storage .................................................................. 4-14

Section 200-Air Separation and Oxygen Compression.............................................. 4-14

Section 300-Coal Grinding, Drying, Transportation and Gasification ........................ 4-15

Section 300a-Coal Grinding, Drying, Transportation ........................................... 4-15
Section 300b-Coal Gasification ............................................................................ 4-15

Section 400-Shift Conversion, Gas Cooling and Mercury Removal .......................... 4-17

Section 500-Acid Gases Removal.............................................................................. 4-18

Section 600-Sulfur Plant and Tailgas Treating........................................................... 4-18

Super SCOT Section ............................................................................................ 4-19

Section 700-Methanol Synthesis and Purification...................................................... 4-20

Section 700a-Methanol Synthesis........................................................................ 4-20
Section 700b-Methanol Purification...................................................................... 4-21

© SRI Consulting v PEP Report 43E

 CONTENTS (Continued)

Steam, Condensate, Fuel and Power Systems ......................................................... 4-21

PROCESS DISCUSSION........................................................................................... 4-25

Coal Pressurization and Feeding ............................................................................... 4-25

Coal Gasification ........................................................................................................ 4-25

Coal Gasification Temperature............................................................................. 4-26
Coal Gasification Pressure................................................................................... 4-26
Heat Recovery Systems ....................................................................................... 4-27

Methanol Synthesis and Purification .......................................................................... 4-27

Environmental Aspects............................................................................................... 4-27

Sulfur Recovery .................................................................................................... 4-27
Mercury Removal ................................................................................................. 4-28
CO2 Emission Control........................................................................................... 4-28

PROCESS ECONOMICS........................................................................................... 4-29

Basis for Cost Estimates ............................................................................................ 4-29

5 METHANOL FROM NATURAL GAS ........................................................................ 5-1

INTRODUCTION ........................................................................................................ 5-1

HISTORICAL PROCESS BACKGROUND ................................................................ 5-1

ICI/Synetix Low Pressure Methanol (LPM) Process .................................................. 5-2

ICI/Synetix Gas-Heated Reformer (GHR) and Advanced Gas-Heated

Reformer (AGHR)....................................................................................................... 5-2

Oxygen-Blown Autothermal Reformer Technology.................................................... 5-6

ICI/Synetix Leading Concept Methanol (LCM) Process............................................. 5-7

REFORMING CATALYSTS........................................................................................ 5-8

METHANOL SYNTHESIS CATALYSTS .................................................................... 5-8

Methanol Synthesis Catalyst Deactivation and Gas Cleanliness Requirements ....... 5-9
Sintering................................................................................................................ 5-9
Sulfur .................................................................................................................... 5-9
Chlorine ................................................................................................................ 5-10

© SRI Consulting vi PEP Report 43E

 CONTENTS (Continued)

Metals ................................................................................................................... 5-10

Oil and Stream...................................................................................................... 5-10

METHANOL SYNTHESIS REACTORS ..................................................................... 5-10

ICI Low Pressure Quench Converter ......................................................................... 5-11

Methanol Casale Axial Radial Converter (ARC) ........................................................ 5-11

Methanol Casale’s Pseudo-Isothermal Methanol Converter...................................... 5-12

ICI/Synetix Tube Cooled Converter............................................................................ 5-13

Linde Spiral Wound Isothermal Methanol Converter ................................................. 5-13

Lurgi Methanol Converters ......................................................................................... 5-14

Lurgi One-Step Methanol Converter .................................................................... 5-14
Lurgi Two Step Methanol Converter..................................................................... 5-15

Other Methanol Synthesis Reactors........................................................................... 5-15

ALTERNATIVE METHANOL SYNTHESIS PROCESS.............................................. 5-15

The Starchem Methanol Process ............................................................................... 5-16

Liquid-Phase Methanol Synthesis Process ................................................................ 5-18

PROCESS CHEMISTRY, EQUILIBRIUM AND KINETICS........................................ 5-19

Step 1: Principal Reformer Syngas Generation Reactions ........................................ 5-19

Step 2: Principal Methanol Converter Synthesis Reactions....................................... 5-20

METHANOL SYNTHESIS REACTION KINETICS..................................................... 5-20

INTEGRATED PROCESS TECHNOLOGY ALTERNATIVES ................................... 5-22

ICI/Synetix Improved Low Pressure Methanol Process ............................................. 5-22

Lurgi MegaMethanol Process..................................................................................... 5-24

Haldor Topsoe Two Step Reforming Process............................................................ 5-26

Haldor Topsoe ATR Reforming Based Methanol Process......................................... 5-26

PROCESS DESCRIPTION ........................................................................................ 5-28

Section 100-Syngas Generation ................................................................................ 5-28

Section 200-Methanol Synthesis................................................................................ 5-29

© SRI Consulting vii PEP Report 43E

 CONTENTS (Concluded)

Section 300-Methanol Purification.............................................................................. 5-30

Steam, Condensate and Fuel Systems...................................................................... 5-30

PROCESS DISCUSSION........................................................................................... 5-41

Reforming ................................................................................................................... 5-42

Methanol Conversion.................................................................................................. 5-43

Distillation ................................................................................................................... 5-43

PROCESS ECONOMICS........................................................................................... 5-43

Base-Case Economics ............................................................................................... 5-43

Basis for Cost Estimates ............................................................................................ 5-43

Economic Sensitivities................................................................................................ 5-44

APPENDIX A: PATENT SUMMARY TABLES.................................................................. A-1

APPENDIX B: DESIGN AND COST BASES .................................................................... B-1

APPENDIX C: CITED REFERENCES............................................................................... C-1

APPENDIX D: PATENT REFERENCES BY COMPANY.................................................. D-1

APPENDIX E: PROCESS FLOW DIAGRAM .................................................................... E-1

© SRI Consulting viii PEP Report 43E

 ILLUSTRATIONS

2.1 Methanol From Coal and Natural Gas Product Values Vs. Capacity.................... 2-12

4.1 Chemical-From –Coal Complex Block Diagram.................................................... 4-5

4.2 Simplified Flow Diagram – Coal Gasification Unit at Kingsport ............................ 4-6

4.3 Gas Clean-Up Conditioning Unit at Kingsport....................................................... 4-6

4.4 Generalized Coal Gasification Chemistry ............................................................. 4-8

4.5 GE/Texaco Coal Gasifier....................................................................................... 4-10

4.6 Shell Coal Gasifier................................................................................................. 4-11

4.7 Methanol From Coal Process Steam Balance ...................................................... E-3

4.8 Methanol From Coal Process

Process Flow Diagram .......................................................................................... E-5

5.1 ICI/Synetix’s Gas-Heated Reformer ...................................................................... 5-4

5.2 ICI/Synetix’s Advanced Gas-Heated Reformer..................................................... 5-5

5.3 Autothermal Reformer ........................................................................................... 5-7

5.4 Methanol Casale ARC Methanol Converter .......................................................... 5-11

5.5 Methanol Casale Pseudo-Isothermal Converter ................................................... 5-13

5.6 Schematic of Lurgi One-Step Methanol Conversion Reactor ............................... 5-14

5.7 Basic Starchem Concept ....................................................................................... 5-17

5.8 Starchem Methanol Synthesis Reactor Scheme................................................... 5-17

5.9 Process Flow Diagram of LMPEOH Scheme........................................................ 5-19

5.10 IMP Methanol From Natural Gas Scheme ............................................................ 5-24

5.11 Lurgi’s Dual Reactor System For Methanol Synthesis.......................................... 5-25

5.12 Lurgi’s Three-Column Energy-Saving Methanol Purification System ................... 5-26

5.13 Haldor-Topsoe Autothermal Reformer .................................................................. 5-28

5.14 Methanol From Natural Gas by the ICI/Synetix Two Stage Reforming
LMC Process
Steam Balance Diagram........................................................................................ 5-41

5.15 Methanol From Natural Gas by ICI Two-Stage Reforming LMC Process
Process Flow Diagram .......................................................................................... E-7

© SRI Consulting ix PEP Report 43E

 ILLUSTRATIONS (Concluded)

5.16 Methanol Product Value Vs. Capacity – Sensitivity to Natural Gas Price by the
ICI Two-Stage Reforming LMC Process ............................................................... 5-49

© SRI Consulting x PEP Report 43E

 TABLES

2.1 Global Methanol Regional Demand Shift, %......................................................... 2-2

2.2 Economics of Methanol Production....................................................................... 2-11

3.1 Coal Derived Methanol Plants in China................................................................. 3-4

3.2 Methanol Derived Chemical Products ................................................................... 3-7

3.3 Major Product Demand/Consumption Segments.................................................. 3-8

3.4 Coal Based Acetic Acid Projects in China............................................................. 3-11

3.5 World Supply/Demand for Methanol 2004 ............................................................ 3-22

4.1 The Second Generation Coal Gasification Process.............................................. 4-4

4.2 Methanol From Coal by the SCGP and ICI/Synetix LPM Process
Design Bases and Assumption ............................................................................. 4-22

4.3 Methanol From Coal Process

Stream Flows......................................................................................................... 4-23

4.4 Sulfur Recovery Rates........................................................................................... 4-25

4.5 Methanol From Coal Process

Total Capital Investment........................................................................................ 4-30

4.6 Methanol From Coal Process

Production Costs ................................................................................................... 4-31

5.1 Commercial Methanol Catalyst Formulations ....................................................... 5-8

5.2 Elementary Steps in a Kinetic Model of Methanol Synthesis ................................ 5-21

5.3 Methanol From Natural Gas by the ICI Two-Stage Reforming LCM Process
Design Basis and Assumptions............................................................................. 5-32

5.4 Methanol From Natural Gas by the ICI Two-Stage Reforming LCM Process
Stream Flows......................................................................................................... 5-33

5.5 Methanol From Natural Gas by the ICI/Synetix Two Stage Reforming
LMC Process
Major Equipment ................................................................................................... 5-39

5.6 Methanol From Natural Gas by the ICI Two-Stage Reforming LMC Process
Total Capital Investment........................................................................................ 5-45

5.7 Methanol From Natural Gas by the ICI Two-Stage Reforming LMC Process
Capital Investment by Section ............................................................................... 5-46

5.8 Methanol From Natural Gas by the ICI Two-Stage Reforming LMC Process
Production Costs ................................................................................................... 5-47

© SRI Consulting xi PEP Report 43E