Oil shale in China

Oil shale in China is an important source of unconventional oil. A total Chinese oil shale resource amounts of 720 billion tonnes, located in 80 deposits of 47 oil shale basins. This is equal to 48 billion tonnes of shale oil. At the same time there are speculations that the actual resource may even exceed the oil shale resource of the United States.

The oil shale industry was established in China already in 1920s. After decrease in the production, the industry started to increase and as of 2008; several companies are engage in the shale oil production or the oil shale-based power generation. After 2005, China became the largest shale oil producer in the world. At the end of 2006, the Fushun Shale Oil Plant was the largest oil shale plant in the world, consisting of seven retorting units with total of 140 Fushun-type retort and producing 180,000 tonnes of shale oil per annum. In 2005, the China National Oil Shale Association was established in Fushun.

The main oil shale research institution in China is the China University of Petroleum.

Reserves

From 2004 to 2006 China undertook the national oil shale evaluation. According to the evaluation, it has been estimated that a total Chinese oil shale resource amounts of 720 billion tonnes, located in 80 deposits of 47 oil shale basins. This is equal to 48 billion tonnes of shale oil. The proven oil shale reserves comprise about 36 billion tonnes.

Oil shale resources in China

Province	In-place oil shale resources (billion tonnes)	Oil yield (Fischer Assay)
Fushun, Liaoning	3.6	6.5%
Maoming, Guangdong	4.1	7%
Huadian, Jilin	0.3	10%
Longkow, Shandong	0.1	14%
Nong’an, Jilin	16	4.5%

The principle Chinese reserves with commercial importance lie in Fushun (Liaoning), Maoming (Guangdong), Huadian and Nong’an (Jilin), and Longkou (Shandong).

The Fushun oil-shale and coal deposit of Eocene age is located in north-eastern China, south of Fushun, Liaoning. Coal and oil shale are in a small outlier of Mesozoic and Tertiary sedimentary and volcanic rocks underlain by Precambrian granitic gneiss. The thickness of the layer of oil shale varies from 48 metres (157 ft) to 190 metres (620 ft) with the average of 80 metres (260 ft). The lacustrine origin oil shale is presented in the Jijuntun Formation, overlying the Guchengzi Formation consisting coal and underlying of green mudstone of the Xilutian Formation.

The Tertiary age Maoming oil-shale deposit is 50 kilometres (31 mi) long, 10 kilometres (6.2 mi) wide, and 20 metres (66 ft) to 25 metres (82 ft) thick. The ore is yellow brown and the bulk density is about 1.85. The oil shale contains 72.1% ash, 10.8% moisture, 1.2% sulfur, with a heating value of 1,745 kcal/kg (dry basis). It is not suitable for above-ground retorting, but it could be used for a power generation by a fluidized bed combustion.

Professor Alan R. Carroll of University of Wisconsin–Madison estimates that Upper Permian lacustrine oil shale deposits of the Junggar-Turpan-Hami basins in northwest China, absent from previous global oil shale assessments, are comparable to the Green River Formation.

History

The extraction of oil shale in China began in 1926 under the Japanese rule. The commercial-scale production of shale oil began in 1930 in Fushun, Manchuria, with the construction of the "Refinery No. 1" operating Fushun-type retorts. After World War II, the shale oil production was ceased, but 100 Fushun-type oil shale retorts and the related shale oil processing units were restored in 1949 after the founding of the People’s Republic of China. In 1950, total 266 retorts were in operation, each with the capacity of 100–200 tonnes shale oil per day.

In 1954, the "Refinery No. 2" began its production and in 1959, the maximum annual shale oil production increased to 780,000 tonnes. The produced shale oil was acid and alkaline washed and hydrotreated for producing light liquid fuels. In 1961, China was producing one third of its total oil production from oil shale. In Maoming, Guangdong Province, a new oil shale retorting plant with 64 retorts was put into operation in 1963.

Since 1965, oil shale usage in Fushun started to decline. With the discovery of Daqing oilfield in 1960s, the shale oil production declined and Sinopec, an operator of shale oil production these times, shut down its oil shale operations in the beginning of 1990s. At the same time, the Fushun Oil Shale Retorting Plant was established as a part of the Fushun Mining Group. It started production in 1992. In 2005, China became the largest shale oil producer in the world. At the same year, China National Oil Shale Association was established in Fushun.

Industry

The major oil shale industry in China is the Fushun Mining Group. At the same tme several other coal and oil companies expand their activities into oil shale extraction.

Fushun Mining Group

Main article: Fushun Mining Group

Fushun Mining Group owns geological reserve for high grade oil shale about 3.6 billion tonnes, of which exploitable reserve is 920 million tonnes, divided between East Open Pit (760 million tonnes) and West Open Pit (160 million tonnes). The oil shale production uses reserves from the West Open Pit, while the East Open Pit oil shale reserves are not mined yet. Oil shale is produced as a byproduct of the coal mining. In 2006, Fushun Mining Group produced 240,000 tonnes of shale oil, and was expected to produce 300,000 tonnes in 2007.

At the end of 2006, the company operated the largest oil shale plant in the world consisting seven retorting units with 20 retorts in each unit, total of 140 Fushun-type retorts. Annual oil shale processing capacity is designed to be 7 million tonnes of oil shale. In addition, the company plans to construct Alberta Taciuk processor (ATP) to treat small size oil shale (particulate oil shale) which can't be processed in Fushun retort. The company also plans another plant with annual shale oil yields of 400,000 tonnes. The 250 tonnes per hour ATP processor will be engineered and provided by Canadian company UMATAC Industrial Processes, a subsidiary of UMA Engineering Ltd. After completing these projects, the shale oil production by Fushun Mining Group will be over 700,000 tonnes annually.

The cost of shale oil production in Fushun is US$18.46 per barrel (1,500 yuan per tonne), of which the mining costs 0.184, transportation 4.25, and retorting 13.84. Fushun shale oil is sold as fuel oil, while part of the surplus retort gas with low heating value is used in an internal combustion engine for producing steam and power. Spent shale and shale ash is used for the cement production; the annual production of cement is 300,000 tonnes and the annual production of bricks is 240 million.

PetroChina

Main article: PetroChina

In 2006, PetroChina, the largest Chinese oil company, set up a department of New Sources of Energy, which is responsible for the oil shale development. In August 2008, it started to build a shale oil plant in Mudanjiang, Heilongjiang. The plant is designed to process 1.2 million tonnes of oil shale per year and produce 100,000 tonnes of shale oil.

Maoming

Maoming oil shale industry was developed from the 1960s to the 1990s by Maoming Petrochemical Company, a subsidiary of Sinopec, which built 64 Fushun-type retorts and 48 gas combustion retorts for producing shale oil. The production peaked with 180,000 tonnes of shale oil per annum. This industry was shut down in the 1990s. The Guandong Province authorities have a plan to use the Maoming oil shale for the power production using fluidized bed combustion.

Longkow Coal Mining Company

Longkow Coal Mining Company plans to produce oil shale as a coal mining byproduct. The project foresees construction of shale oil plant with capacity of 200,000 tonnes of shale oil per year by using Fushun-type retorts. In addition, the shale char mixed with particulate oil shale would be burnt in fluidized bed combustion for power generation, and the shale ash would be utilized for production of building material.

Jilin Energy & Communication Corporation

In 1996, Jilin Energy & Communication Corporation, a subsidiary of the China Power Investment Corporation, put into operation the first oil-shale-fired power plant in China, consisting of three circulating fluidized-bed units with capacity of 12 megawatts (MW). In 2005, the company in cooperation with the Jilin Municipal Government put forward the Huadian oil shale comprehensive utilization project. The project includes construction of the shale oil plant with capacity of 200,000 tonnes of shale oil per year, two circulated fluidized bed combustion units with capacity of 50 MW each and production of 1.2 million tonnes of cement and other building materials utilizing spent shale and shale ash. The shale oil plant will utilize the Petrosix technology.

Royal Dutch Shell

Royal Dutch Shell has established a joint venture with the Jilin Guangzheng Mineral Development Company Limited to explore and develop oil shale resources in Jilin Province. 61% of shares of the joint venture, Jilin Shell Oil Shale Development Company Limited (Jilin Shell), belongs to Shell China, while 39% is owned by Jilin Guangzheng. The company is planning to use the Shell's in-situ conversion process.

Other industries

In Wang Qing (Jilin Province), a private company set up 10 Fushun-type retorts, and produced 15,000 tonnes of shale oil in 2006. The Harbin Gas and Chemical Company plans set up a shale oil plant with the capacity of 1,000 tonnes of shale oil per day in Heilongjiang. Similar plant is planned by the Song Ya San Coal Mining Company.

The Mingxin Mining Company is planning to co-produce coal and oil shale in Mingxin, Gansu Province. The planned shale oil plant would have a capacity of 400,000 tonnes of shale oil per year. In addition, five private companies produce about 30,000 tonnes of shale oil by utilizing the Fushun-type retorts in Jilin.Other potential industries could be start in Uromqi (Xinjiang), Yongden (Gansu), and Chanpo (Hainan).

Research

Main article: China University of Petroleum

The main oil shale research institution in China is the China University of Petroleum. Its Applied Chemistry Department is the main institution dealing with oil shale. The university's oil shale experts undertake oil shale evaluation, consulting, and reviewing work for pre-feasibility and feasibility studies and development projects for domestic and foreign countries. e.g. Mongolia.