China's coal-to-gas projects have developed rapidly since 2022, primarily because of improving profits thanks to maturing coal-to-gas catalyst technology, as well as lower coal costs than natural gas auction prices.
The coal-to-gas production capacity has reached 7 billion cubic meters per year by 2023 due to the commissioning of Inner Mongolia Huineng Coal Chemical's coal-to-gas Phase II project and Datang Keqi coal-to-gas Phase II project, with the capacity utilization rate up to 93%. As a result, China's coal-to-gas production came in at 6.51 billion cubic meters, rising by 1.83 billion cubic meters compared to 2020, accounting for 2.84% of the domestic natural gas production.
At present, there are four coal-to-gas projects that have been put into operation in China, mainly in the coal-rich provinces such as Xinjiang and Inner Mongolia. Separately, they are Xinjiang Qinghua Coal Group's Phase I coal-to-gas project with the capacity of 1.375 billion cubic meters per year, Xinjiang Yili Xintian Coal and Chemical's 2 billion cubic meters per year coal-to-gas project, Inner Mongolia Datang Keqi's 1.33 billion cubic meters per year Phase I coal-to-gas project, and Inner Mongolia Huineng Coal Chemical's 1.60 billion cubic meters per year project.
Progress of part of Coal-to-gas Projects
No. |
Project |
Total Production Capacity (Billion Cubic Meters) |
Location |
Progress |
1 |
Xinjiang Qinghua Coal-to-Gas Project |
5.50 (with 1.375 under operation) |
Xinjiang |
The first phase with a capacity of 1.375 billion cubic meters per year was put into operation in December 2013. The second phase contains two 2.00 billion cubic meters per year of capacities, has a planned construction period of 3 years. |
2 |
Xinjiang Xintian Coal-to-Gas Project |
2.00 |
Xinjiang |
Full operation |
3 |
Datang Keqi Coal-to-Gas Project |
4.00 (with part under operation) |
Inner Mongolia |
The A series of the second phase of the Datang Keqi Coal-to-Gas Project has achieved gas production in October 2023, and the B series is expected to be put into operation in June 2024 and reach target production by the end of the year. The third phase is in the preparation stage except for public works, and after completion, it can achieve a production capacity of 4.00 billion cubic meters per year. |
4 |
Datang Fuxin Coal-to-Gas Project |
4.00 |
Liaoning |
/ |
5 |
Inner Mongolia Huineng Coal-to-Gas and Liquefaction Project |
1.60 |
Inner Mongolia |
Full operation |
6 |
China National Energy Group Xinjiang Energy |
4.00 |
Xinjiang |
On March 7, 2024, Xinjiang Zhundong Economic and Technological Development Zone made the first information disclosure on the environmental impact rating of China National Energy Group Xinjiang Energy's 2.00 billion cubic meters per year coal-to-gas project. |
7 |
China Coal Group Xinjiang Energy |
4.00 |
Xinjiang |
On January 19, 2024, China Coal Group Xinjiang Energy released the announcement of the 4.00 billion cubic meters per year coal-to-gas project social stability risk analysis, assessment and procurement, and the announcement of the 4.00 billion cubic meters per year coal-to-gas project water resources demonstration report preparation service procurement. |
8 |
Xinjiang Energy (Group) |
4.00 |
Xinjiang |
In September 2022, the expert review meeting for the pre-feasibility study report of Xinjiang Energy (Group)'s 4.00 billion cubic meters per year coal-to-gas project was held in Beijing. |
9 |
Xinjiang Longyu Energy |
4.00 |
Xinjiang |
In November 2023, Henan Energy and Chemical Industry Group Chemical New Materials Company organized an internal review meeting for the feasibility study report of the 4.00 billion cubic meters per year coal-to-gas project of Xinjiang Longyu Energy Zhundong Coal Chemical. |
10 |
Xinjiang Tianchi Energy |
4.00 |
Xinjiang |
In September 2023, the first environmental assessment information for the Zhundong 4.00 billion cubic meters peryear coal-to-gas project of Xinjiang Tianchi Energy was released. |
11 |
Xinjiang Qiya Chemical |
6.00 |
Xinjiang |
The project is scheduled to start construction in 2024 and be completed and put into operation in 2027. It is matched with the construction of 3GW wind and solar green power, 20,000 t/y green hydrogen plant, as well as CCS and green methanol plant projects. |
12 |
Wojiang Clean Energy (Xinjiang Zhundong Economic and Technological Development Zone) |
2.00 |
Xinjiang |
The construction of coal-to-gas projects can directly utilize the existing West-East Gas Pipeline to transport Xinjiang gas to the eastern coastal areas. |
13 |
Yitai Yili Energy |
2.00 |
Xinjiang |
/ |
14 |
Inner Mongolia Huaxing New Energy |
4.00 |
Inner Mongolia |
On November 23-24, 2023, the kickoff meeting for the first phase of Inner Mongolia Huaxing New Energy 's 4 billion cubic meters per year of coal-to-gas project with an annual production of 2 billion cubic meters was held at Saiding Company. |
15 |
Beijing Enterprises Ordos Coal-to-Gas Project |
4.00 |
Inner Mongolia |
It restarted the project in June 2023. |
16 |
Inner Mongolia Guochu Energy Group |
4.00 |
Inner Mongolia |
/ |
17 |
Anhui Energy Group |
2.20 |
Anhui |
/ |
Source: OilChem
Data from OilChem showed that, the coal-to-gas production costs remained at Yuan 1.60-2.60/cubic meter, while the natural gas auction prices beyond contracts were pegged at Yuan 2.95-2.98/cubic meters in May, indicating that there is room for profitability in coal-to-gas production.
So in this case, many coal-to-gas projects have been restarted in 2023, with a construction period of about 3 years, which are expected to come on stream over 2026-2027. At that time, the domestic coal-to-gas production capacity is projected to increase by 56.30 billion cubic meters per year, lifting the proportion of coal-to-gas in the natural gas supply structure in China.
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com