Methanol in energy unique to China – consultant

10 April 2008 07:25  [Source: ICIS news]

XIAN, Shaanxi (ICIS news)--China is the only country at present in the world which is using methanol in a wide number of energy applications due to a number of reasons unique to the nation, said an industry consultant on Thursday.

The cheap and abundant supply of coal as feedstock for making methanol compared with expensive crude oil was a main reason why China has pursued the use of methanol in the energy pool, said Mark Berggren of MMSA at the Chemease methanol and derivatives conference.

Refining margins in China were also currently negative based on yuan (CNY) 4,900/tonne ($700/tonne) of gasoline and methanol prices were much lower at CNY3350/tonne.

The country was also largely starting its fuels transportation infrastructure from scratch so the replacement of these facilities was less of an issue when compared with the western countries, he said.

Local auto manufacturers were looking to capture energy market share with 'low running costs' and the Chinese government was pushing for coal to replace part of energy derived from crude, Berggren said.

The same factors did not hold for markets like the US where ample supply of methanol, the economics of methanol production and the logistics of the transportation fuel system do not work in its favour, Berggren said.

The two-day conference ends on Friday.

($1=CNY7)

For more on methanol, visit ICIS chemical intelligence

By: Anu Agarwal
+65 6780 4359

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