Domestic coal mining giant Shenhua Group and US-based Dow
Chemical Company have signed a cooperation agreement and announced
plans for a feasibility study, bringing the two a step closer to
building a world-class coal-to-chemicals complex in northwest
China's Shaanxi Province.
The project will use "clean coal" technologies that convert coal
to methanol to produce ethylene and propylene, the building blocks
of various plastics and chemical products.
The complex will include a chlor-alkali unit, enabling the
production of caustic soda, vinyl chloride monomer and chlorinated
organics. Other derivatives planned for the complex include
glycols, amines, solvents, surfactants, acrylic acid and propylene
The feasibility study will encompass environmental impact
assessment, water supply, front-end loading engineering design,
market and product mix, logistics and supply chain, and economic
The study is expected to take approximately two years. The two
companies will then compile a project application report and submit
it for government approval.
"We are delighted to see the project moving to the next phase
with Shenhua," said Andrew Liveris, chairman and CEO of Dow. "This
project aligns with Dow's strategy to invest in growth geographies
like China, and will build Dow's competitive position to serve
customers in Asia with locally produced products and
Chen Biting, chairman of Shenhua Group, said producing oil
substitutes converted from coal is of great significance to China
and the world. "The coal chemical plant will make full use of the
advantages of the two companies. This project will form a
commercially competitive industry, with a positive impact on the
local economic growth."
Dow officials promised that workers and communities in Shaanxi
will benefit from a safe, high-standard production facility as Dow
will bring its advanced know-how in environmental protection,
worker safety and energy efficiency to the joint venture.
The success of this project will provide China a new and viable
way to produce chemical products from its indigenous coal and salt
resources, helping it to reduce its reliance on oil imports and
maintain sustainable growth, said Liveris.
(China Daily May 16, 2007)