South China chemical producer halts ammonia output as gas crisis deepens

BEIJING (Reuters) - A major Chinese chemical producer based in the southern province of Yunnan said it has halted production of synthetic ammonia and urea due to natural gas shortages as China’s winter heating crisis deepens.

Yunnan Yuntianhua Co stopped a 500,000-tonne per year production plant of ammonia and an 800,000-tonne a year urea production line at its Yunnan Shuifu subsidiary, it said in a filing to the Shanghai Stock Exchange on Tuesday.

“Gas producers have suspended gas supplies to major industrial consumers in southwestern regions. Our Shuifu plant will temporarily halt production of two chemicals as a result,” the company said.

Yuntianhua, which halted production on Monday, will book a 25 million yuan ($3.78 million) loss due to the disruption. The company does not expect to resume before Dec. 31.

The stoppage comes as at least one state natural gas producer has diverted supplies of the fuel to China’s north for residential heating use.

State radio reported last week that PetroChina has sent at least 5 million cubic metres of gas from the southern provinces of Zhejiang, Fujian and Guangdong province to help relieve shortages in northern China.

A PetroChina official familiar with the plan said as much as 10 million cubic metres has been diverted north. He declined to be named because he is not authorised to speak to the press.

Reporting by Meng Meng and Josephine Mason; Editing by Tom Hogue and Manolo Serapio Jr.