Shenhua gets final nod for Inner Mongolia MTO

18 December 2006 05:17  [Source: ICIS news]

SINGAPORE (ICIS news)--Shenhua Group, the Chinese coal major, has received the final approval from the central government for its $1.5bn methanol-to-olefins (MTO) project in Inner Mongolia province, a company official said on Monday.

The company earlier obtained approval to build the project’s coal-based 1.8m tonne/year methanol feedstock unit at Baotou.

The latest approval was for the MTO unit, which will produce 600,000 tonnes/year of olefins.

Joint venture company Baotou Shenhua Coal Chemical will operate the project, the official said.

Shenhua had increased its stake to 76% from 51% after Hong Kong’s Kerry Group withdrew from the project, the official said. Another shareholder, Shanghai Huayi Group, has a 24% stake.

A 100-megawatt thermal power station, polyethylene (PE) and polypropylene (PP) units are also in the pipeline. The entire project is scheduled to start up in 2010.

Shenhua has two other coal-to-olefins (CTO) projects in the pipeline. The company signed an agreement with Dow Chemical in December 2004 to conduct a feasibility study for a CTO project at Yulin, Shaanxi province, and it is building a methanol-to-propylene (MTP) unit in Ningxia province.

By: Florence Tan
+65 6780 4359

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