BEIJING Dec 27 Sinopec Engineering Group
said it has entered into a deal to build a $3.1
billion plant in northern China to turn coal into
petrochemicals, as China seeks to reduce its reliance on
Sinopec Engineering will be responsible for engineering,
procurement and construction of the 18.67 billion-yuan project
in Inner Mongolia, which it said would be the largest of its
kind in the world.
The plant will produce 3.6 million tonnes a year of olefins
- mostly ethyelene which is a building block for petrochemicals
that are widely used in construction, textiles and automobiles.
China, the world's biggest net importer of oil, is a leading
buyer of petrochemicals, and imports about 45 percent of its
Sinopec Engineering, a newly listed unit of state-run
Sinopec Group, said it would deploy a self-developed technology
to make olefins from methanol, which can be extracted from coal.
The coal-based process is cost competitive versus China's
conventional way of making petrochemicals from more costly
naphtha, a refinery product processed from crude oil.
"Sinopec has long realized that it needs to diversify
feedstocks for making ethylene," said Yan Kefeng, an analyst
with consultancy IHS CERA.
The plant, at Uxin county of Inner Mongolia's Ordos city,
is owned by Zhong Tian He Chuang Co. Ltd, a joint venture which
has Sinopec Corp and China Coal Energy Company among
its main investors.
"It is a significant milestone for SEG to establish an
integrated new coal chemical industrial chain," the company said
in a statement released late on Tuesday.
Key facilities of the investment include a 3.6 million tpy
synthetic methanol unit, two 1.8 million-tpy methanol to olefin
units and two polypropylene units. Sinopec Engineering will hand
over the project by Oct 30, 2015.
(Reporting by Chen Aizhu; Editing by Richard Pullin)