Synthesis Energy plans China coal to chem plant

04 May 2007 06:27  [Source: ICIS news]

SINGAPORE (ICIS news)--Synthesis Energy Systems, a US-based coal-to-chemicals firm, is to set up another joint venture coal gasification plant to produce methanol and dimethly ether (DME) in China with Yima Coal Industry Group in Henan province, both companies said late on Thursday.

The plant is expected to have a daily capacity of 10m standard cubic metres of syngas, which will be the feedstock for an expected annual capacity of 1m tonnes of methanol, a joint statement said.

The methanol will be used to support growing demand from Henan’s industrial companies, Lorenzo Lamadrid, chairman of Synthesis Energy Systems said in a statement.

In addition to the coal-derived methanol, the plant will also produce DME, a substitute for gasoline, diesel and liquid petroleum gas.

The companies did not state how much would be produced, how much money was to be invested in the new plant or what the ownership structure would take.

Methanol producers from around the globe have rushed to set up plants in China leveraging on its cheap coal and the possibility the authorities will mandate the use of DME as an alternative transportation fuel.

“This joint venture is a step forward for China, as the country seeks solutions to address its reliance on imports and offset the effects of rising oil prices by accelerating its efforts to develop oil substitution programmes that utilise its vast deposits of coal,” said Wu Yulu, chairman of Yima, a large coal company operating in resource rich Henan.

Synthesis Energy Systems is expected to start commercial operation of its first synthesis gas plant in Shandong within the next three months.

It will also start commercial operation of a coal gasification plant to produce methanol and DME in Inner Mongolia by late 2008.

By: Matt Kovac
+65 6780 4359

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