Dynalectron Corp. has signed an agreement with a Japanese trading company and the Chinese government to study construction of a multi-million dollar synthetic fuels plant in China.
The six-month study will determine whether Dynalectron's H-coal process can be used to economically convert Chinese coal into liquid fuels.
Dynalectron officials said the Commerce Department has already approved of selling the synthetic fuel technology to the Chinese.
C. Itoh & Co., one of Japan's biggest multi-national trading firms, is heading a consortium of Japanese banking and business companies that are investigating production of synthetic fuels in China.
The Japanese group hopes to use the Chineese synfuels output to replace the costly imported oil upon which Japan depends for much of its energy.
China's Ministry of Coal Industry and Central Coal Mining Research Institute will provide samples of Chinese coal to be tested under Dynalectron's H-coal method for creating liquid fuels.
Earlier this week Dynalectron announced that it's H-coal pilot plant in Catlettsburg, Ky., had completed a record 131-day run, turning 19,200 tons of coal into almost 60,000 barrels of liquid fuels.
Financed by federal grants, the Kentucky plant uses a process developed by Dynalectron's subsidiary Hydrocarbon Research Inc. and is operated by Ashland Oil Inc.
The Catlettsburg plant is being used to test the machinery and techniques under production conditions as the final step toward construction of a full-scale synthetic fuels plant. Dynalectron, Ashland and several other firms participating in the project have applied for federal grants to finance the full-size plant. The Reagan administration, however, is talking of slashing government spending on synfuels or perhaps eliminating it entirely.
The Japanese group, on the other hand, is beginning the first phase of studies that could lead to construction of a commercial H-coal plant in the early 1990s, Dynalectron officials said.
The H-coal process produces a synthetic crude oil rich in naphtha--a raw material for high-octane unleaded gasoline--and other products that can be made into home heating oil.
On its latest and longest run, the plant used Illinois coal as a raw material. Seven other runs were completed earlier using other types of coal.
From Aug. 7, when the run began, to Dec. 11, when it was completed, the plant ran at better than 71 percent of capacity, the designers said. Now the plant will be shut down for two months to evaluate the effect of the long run on components. Next spring it is to resume testing using different types of coal from Wyoming and Dakota as raw material.
The H-coal plant is one of two such projects now operating as the first step toward commercial production of synthetic fuels. Dynalectron and Bechtel Corp., a big California engineering firm, are designing a commercial-scale plant that is capable of producing 50,000 barrels of synthetic oil a day.
Besides studying the economic feasibility of building the complex plant in China, Dynalectron will evaluate various kinds of chinese coal to see which are best for conversion into liquid fuels.
China has vast coal reserves and already runs a number of large plants that convert coal into coal gas for use in heating and cooking, Dynalectron officials said.