FocusJapan consortium pushes DME in fuel use

03 September 2008 12:37  [Source: ICIS news]

By Tomomi Yokomura

TOKYO (ICIS news)--Fuel DME Production Co aims to explore the market for dimethyl ether (DME) and commercialise the fuel product in Japan within the next three years, a company spokesman from Mitsubishi Gas Chemical (MGC) said on Wednesday.

The firm, one of a Japanese consortium consisting of nine firms behind Fuel DME, had started production at its recently completed 80,000 tonne/year DME plant, which could be expanded up to 100,000 tonnes/year, in Niigata, the spokesman said.

The company had held a ceremony to mark the plant's completion on Wednesday, he added, who added it was to be solely used for promoting the use of DME as fuel.

Japan’s Ministry of Economy, Trade and Industry (METI) is undertaking a project, named DME Promotion Center, which is designed to encourage Japanese companies to use DME as fuels by giving them subsidies.

DME will be supplied by Fuel DME Production to companies participating in the project, according to the spokesman.

So far, a Niigata-based fish cake manufacturer had been chosen as a participant and was building a boiler which would use DME as a fuel when it starts up in the next six months, the spokesman said.

“The operating rate of the (DME) plant is still low, and we’ll probably produce some (DME) and then stop operating, restart and stop again," the MGC spokesman said.

"Because we only have one user at this point, we won’t need to produce in a large amount yet.”

When DME’s quality as fuel was proven and able to be commercialised, the company expected to build a larger plant with a capacity of between 100,000 tonnes/year and 1.7m tonnes/year, the spokesman added.

“But I think it’ll be longer than three years until we can build a commercial plant,” he said.

One possibility was to produce DME in Papua New Guinea using methanol produced from liquefied natural gas (LNG) project led by the US' ExxonMobil, the spokesman said.

“But we can’t do anything until (Exxon Mobil’s) project is finalised,” he said. "I don’t think it (LNG production) will start up in 2010 as scheduled. Maybe it’ll be around 2013."

The spokesman also said that another alternative was to import methanol from Ar-Razi’s 1.7m tonne/year complex in Saudi Arabia which started up its latest expansion in July, to Japan and produce DME locally.

“But it would cost a lot,” he added.

Ar-Razi is a joint venture of SABIC (Saudi Basic Industries Corp) and a Japanese consortium led by MGC.

Other companies in Fuel DME Production Co include Itochu Corp, Taiyo Oil, Toyota Tsusho, JGC and Mitsubishi Chemical Holdings. MGC is a leading shareholder with 29.15%.

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By: Tomomi Yokomura
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