Datang to have China’s first MTP project on stream by 2H ‘09

13 January 2009 10:57  [Source: ICIS news]

SHANGHAI (ICIS news)--Datang International Power plans to start up China’s first methanol-to-propylene (MTP) project in the northern province of Inner Mongolia  in the second half of 2009, a company source said on Tuesday.

Construction on the 470,000 tonne/year polypropylene (PP) plant started in 2007, with investment in the project totalling around yuan (CNY) 14bn ($2.05bn), the source said.

The project has adopted MTP technology to produce feedstock propylene, which was used for PP production, the source said.

According to the source, the cost of propylene made from methanol was more competitive than that made from crude oil, if crude oil prices were above $35/bbl.

However, if coal prices were to rise, MTP's cost advantage would be impaired, as the methanol materials were made from coal, the source said.

China’s PP demand had been heavily dampened since July 2008 amid the global financial crisis. Demand would likely remain weak in 2009, traders said.

In view of the rapid growth in production and weak demand, China’s PP imports were likely to tumble in 2009, sources said.

China’s second MTP project, which includes a 500,000 tonne/year PP unit built by Ningxia Shenghua Coal Group, would likely come on stream in 2010.

($1 = CNY6.84)

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By: Longston Li
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