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China's Lu'an Group said Tuesday that construction work has started on its pioneering 5 million tonne/year coal-based synthetic oil production facility in Changzhi City, northern Shanxi Province.

The facility, named as Shanxi Lu'an Coal-based Synthetic Oil Demonstration Factory, have reached a production capacity of 2 million tonne/year of synthetic oil, the company said.

Lu'an Group's core technology was developed independently by the Shanxi Research Institute of Coal Chemistry under the Chinese Academy of Sciences, the China Petroleum and Chemical Industry Association said.

The facility has incorporated coal bed methane reforming, which can reduce carbon dioxide emissions by nearly 2 million tonnes/year. The plant facility also contains a water treatment facility to ensure that water treatment reuse can achieve zero discharge of wastewater.

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 whole crude oil, but can also be synthesized from other raw materials. Synthetic oil is used as a substitute for lubricant refined from petroleum when operating in extremes of temperature, because, in general, it provides superior mechanical and chemical properties than those found in traditional mineral oils.