Industrial giant Siemens signed an agreement with Shenhua
Ningxia Coal Group (SNCG) yesterday to supply its advanced
gasification equipment, a move that marks the German company's
entry into China's coal gasification industry.
Under the agreement Siemens Power Generation (PG) group will
sell key gasification equipment to SNCG for a coal-based dimethyl
ether (DME) project, with a planned annual production of 830,000
Siemens PG also signed a memorandum of understanding to provide
equipment for SNCG's coal-based propylene project that when
completed will be one of the largest in the world.
"The move further strengthens our position in Chinese and
worldwide gasification markets and the coal-to-chemical business,"
said Lutz Kahlbau, president of Siemens PG China.
It also marks a faster pace of development of SNCG's large-scale
coal-to-chemical projects, he said. Kahlbau did not disclose the
value of this contract.
Kahlbau said that the fuel gasification process Siemens uses,
known as GSP, is one of the three most advanced technologies of its
kind in the world. He added that its designs are efficient and more
environmentally friendly than in the past.
In addition to a wide range of coal grades, the Siemens
technology can also use biomass as well as petroleum coke and
refinery residues as feedstocks.
Siemens is tapping into an enormous market for its technology.
According to a draft plan for the development of China's coal
chemical industry, the sector will see more than 1 trillion yuan
invested by 2020.
As for SNCG, it now has five coal chemical projects under
construction, representing a total investment of about 100 billion
According to Zhang Wenjiang, chairman of SNCG, the DME phase I
project will produce 210,000 tons of DME and 600,000 tons methanol
per year, refined from 1.87 million tons of coal. Investment cost
is set at about 3 billion yuan.
The company plans later expansion to produce 830,000 tons of DME
per year, which will mainly be used as auto fuel and an overall
alternative to petroleum.
Zhang said SNCG's coal-based propylene project will require an
investment of 13 billion yuan, with capacity projected at 520,000
tons of polypropylene per year and 220,000 tons of gasoline and
liquefied fuel as by-products.
This project is not only the biggest project to date by SNCG,
but one of the biggest coal-based propylene projects in the
"The cooperation of Siemens with SNCG is a significant milestone
for Siemens China as well as Siemens global. We will work hard to
look for other opportunities in China's booming energy market,"
said Richard Hausmann, president and CEO of Siemens China.
(China Daily January 18, 2007)