Lu’an Group starts construction of coal-based synthetic oil plant in Shanxi province

China’s Lu’an Group said that construction work has started on its pioneering 5 million ton per year coal-based synthetic oil production facility in Changzhi City, northern Shanxi Province. The facility, named Shanxi Lu’an Coal-based Synthetic Oil Demonstration Factory, has reached a production capacity of 2 million tons per year of synthetic oil, the company said. The demonstration project started in December 2008. The company uses a core technology, which was developed independently by the Shanxi Research Institute of Coal Chemistry. Synthetic oil is a lubricant consisting of chemical compounds that are artificially made (synthesized). Synthetic lubricants can be manufactured using chemically modified petroleum components rather than crude oil, but can also be synthesized from other raw materials. The facility has incorporated coal bed methane reforming, which can reduce carbon dioxide emissions by nearly 2 million tons per year. The plant also has a water treatment facility to ensure zero discharge of wastewater. Lu’an Group is one of five coal enterprise groups in Shanxi, with total assets of RMB63.4 billion (US$9.9 billion).