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Oil Shale In China

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					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%

Nongn, Jilin

16
4.5%

The principle Chinese reserves with commercial importance lie in Fushun (Liaoning),
Maoming (Guangdong), Huadian and Nongn (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 (160?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 Wisconsinadison 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 Republic of China. In 1950, total 266?retorts were in operation, each with the
capacity of 100200?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 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.

 References

^ a b c d e f g h (PDF) Survey of energy resources (edition 21 ed.). World Energy
Council        (WEC).       2007.      pp.?93115.         ISBN        0946121265.
http://www.worldenergy.org/documents/ser2007_final_online_version_1.pdf.
Retrieved 2008-10-25.?

^ a b Carroll, Alan R. (October 2007). "Upper Permian Oil Shale Deposits of
Northwest China:World's Largest?". Colorado School of Mines: 27th Oil Shale
Symposium.?

^ a b c d e f g h i j k l m n o p Qian, Jialin (2006). "Oil Shale Activity in China" (PDF).
26th      Oil        Shale      Symposium;        Colorado       School       of    Mines.
http://www.ceri-mines.org/A02c-JialinQianpaper.pdf.pdf. Retrieved 2008-10-25.?

^ a b c d e f g h (PDF) Shale oil: Perspective with China focus. Intelligence Dynamics.
2007-03-07.          http://www.accelenergy.com/downloads/Shale_Oil_in_China.pdf.
Retrieved 2008-10-25.?
^ a b c Purga, Jaanus (2004). "Today's rainbow ends in Fushun" (PDF). Oil Shale. A
Scientific-Technical Journal (Estonian Academy Publishers) 21 (4): 269272. ISSN
0208-189X.      http://www.kirj.ee/public/oilshale/1_purga_2004_4.pdf.   Retrieved
2008-10-25.?

^ a b c d Yin, Liang (2006-11-07) (PDF). Current status of oil shale industry in
Fushun,                   China.                  Amman,                 Jordan.
http://www.sdnp.jo/International_Oil_Conference/rtos-A106.pdf.         Retrieved
2008-10-25.?

^ a b c d e f Qian, Jialin (2007). "One Year Progress in the Chinese Oil Shale
Business" (PDF). 27th Oil Shale Symposium; Colorado School of Mines.
http://mines.conference-services.net/viewPDF.asp?abstractID=162200&conferenceID
=1128. Retrieved 2008-10-25.?

^ a b c d e f Dyni, John R. (2006) (PDF). Geology and resources of some world
oil-shale deposits. Scientific Investigations Report 20055294. U.S. Department of the
Interior.                   U.S.                  Geological                 Survey.
http://pubs.usgs.gov/sir/2005/5294/pdf/sir5294_508.pdf. Retrieved 2008-10-25.?

^ Qian, J.; Wang, J.; Li, S. (2003). "Oil Shale Development in China" (PDF). Oil
Shale. A Scientific-Technical Journal (Estonian Academy Publishers) 20 (3): 356359.
ISSN 0208-189X. http://www.kirj.ee/public/oilshale/9_qian_2003_3s.pdf. Retrieved
2008-10-25.?

^ Chandler, Graham (2006). "US eyes Alberta as model for developing oil shale"
(PDF).           Alberta           Oil         2           (4):          1618.
http://grahamchandler.ca/USEyesOilShaleAsModelforDeveloping%20Shale.pdf.
Retrieved 2008-10-25.?

^ Zhao, Yong Hui (2005). "Utilization of retort gas as fuel for internal combustion
engine for producing power". Oil Shale. A Scientific-Technical Journal (Estonian
Academy Publishers) 22 (1): 2124. ISSN 0208-189X.?

^ "PetroChina Starts Building Oil Shale Refinery In Heilongjiang". Downstream
Today.                                                             2008-08-14.
http://www.downstreamtoday.com/News/Articles/200808/PetroChina_Starts_Building
_Oil_Shale_Ref_12376.aspx. Retrieved 2008-10-25.?

^ Wang, Qing (2005). "Strategy of Huadian oil shale comprehensive utilization". Oil
Shale. A Scientific-Technical Journal (Estonian Academy Publishers) 22 (3): 305316.
ISSN 0208-189X.?

^   "Top   firm   develops   oil   shale   reserves".   China   Daily.   2005-12-28.
http://english.peopledaily.com.cn/200512/28/eng20051228_231305.html.    Retrieved
2008-10-25.?

^ "Jilin and Shell sign oil sgale agreement". Shell China. 2005-09-01.
http://www.shell.com/home/content/china-en/news_and_library/press_releases/2005/s
ure_jvc_0109.html. Retrieved 2008-10-25.?

^ "Jilin, Shell to develop oil shale resources". Asia Times. 2006-04-05.
http://www.atimes.com/atimes/China_Business/HD05Cb02.html.     Retrieved
2008-10-25.?

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