(China Knowledge, Sept 22, 2006)- ¨C The Shenhua Group is planning to invest more than RMB 40 billion in three projects that turn coal into base chemicals, according to the South China Morning Post Friday.

Construction of two of the projects is scheduled to be completed within the next four years. The third project, in Inner Mongolia with an investment of RMB 13 billion, should be approved soon by the National Development and Reform Commission (NDRC), said Shenhua Group¡¯s Vice President Zhang Yuzhuo to the South China Morning Post, adding that its construction will take not more than 48 months.

The project in Inner Mongolia will build a plant that uses coal to produce 1.8 million tons of methanol, 300,000 tons of ethylene, and 300,000 tons of propylene. These three projects are part of the government¡¯s efforts to reduce China¡¯s reliance on crude oil as an energy source and chemical feedstock.

For Shenhua Group, the parent firm of Hong Kong-listed China Shenhua Energy Co. Ltd. that deals with coal, power and transport, the three projects reflect its strategy of tapping on opportunities brought about by high oil prices and the government¡¯s intention to diversify China¡¯s energy sources.

Currently, China imports 40% of its crude oil and 35% to 60% of its basic chemicals, while coal requirements are mainly derived from the Mainland.

In addition to these three projects, Zhang also told the Post that Shenhua will partner with coal-based chemical maker the Shanghai Huayi Group. Exact shareholdings of the project have not been finalized.

Shenhua will also be conducting a feasibility study with U.S.-based Dow Chemical to build a plant in Yulin, Shaanxi province, to explore the possibility of producing three million tons of methanol and one million tons of ethylene and propylene, as well as PVC.
Source:China Knowledge
tag:China energy coal