Firm Purchases Harbin Coal-to-Petrochemicals Plant

Saturday, August 19th 2006

China National Coal Group Corp is buying a major coal-to- petrochemicals plant in Harbin, Northeast China, where it plans to turn out 600,000 tons of olefin products annually using home-grown technology.

The Beijing-based State-owned company, China’s second-biggest coal firm, has reached an initial agreement with the Harbin municipal government on the takeover of Harbin Coal Chemical Engineering Co Ltd.

Within the next three years, China National Coal aims to produce olefin products such as ethylene and propylene, widely used in the production of plastics, said Jing Tianliang, president of the coal conglomerate.

The plant’s annual production target for 2009 also includes 10 million tons of coal and 2 million tons of methanol, compared with the current capacity of 2.6 million tons of coal and 140,000 tons of methanol.

“Both parties have reached a consensus, and they are in talks to finalize the deal,” said Zhang Guobao, vice-minister of the National Development and Reform Commission (NDRC).

Zhang revealed the information in Beijing on Thursday after a major accord was signed to ensure the project’s technical viability.

China National Coal has established a 20-year partnership with an affiliate of the Chinese Academy of Sciences (CAS) to speed up the practical application of major technological breakthroughs.

According to the agreement, China National Coal will use DMTO (dimethyl ether/methanol-to-olefin) technology developed by the Dalian Institute of Chemical Physics of the CAS at the Harbin plant.

Liu Zhongmin, a senior official at the Dalian institute, said that the home-grown technology enjoys good market prospects given the current high price of oil.

“Our technology has a competitive edge over the traditional method of converting crude oil into olefin, as global oil prices keep rising,” Liu said.

Liu added that the Harbin project is only the start of the institute’s co-operation with China National Coal.

“We have signed a strategic partnership agreement, and expect to work on more joint projects in the future,” Liu told China Daily.

Zhang from the NDRC said that the government was keen to develop alternatives to oil, in order to cushion the Chinese economy from the effect of soaring oil prices.

But companies should also avoid excessive investment in sectors such as coal-to-liquids, Zhang warned.

“Coal-to-petrochemicals is a good way (for China) to cope with high oil prices, but we should develop it with a good awareness of environmental protection and economic returns,” said Zhang.

The NDRC issued an industry circular earlier last month in order to tighten its control of China’s coal-to-liquids sector.

(c) 2006 China Daily; North American ed.. Provided by ProQuest Information and Learning. All rights Reserved.