China to construct first coal-to-olefin

Construction of China’s first coal-to-olefin unit has been approved by the National Development and Reform Commission (NDRC). The RMB12 billion (US$1.53 billion) project, located in Baotou, Inner Mongolia, is being undertaken by Chinas largest coal producer, the Shenhua Group, and Shanghai Huayi Group, a large-scale enterprise group established by the re-organization of the assets of the Shanghai Municipal People’s Government. The project will explore a new indirect method to replace oil, using Fischer-Tropsch synthesis whereby coal is gasified into syngas, which is further synthesized into fuel oil and chemicals. Construction will include a 1.8 million ton per annum (TPA) methanol unit, a 600,000 TPA methanol-to-olefin unit, a 300,000 TPA polythene unit and a 300,000 TPA polypropylene unit. The project is expected to be operational by 2008. (December 18, 2006)