14 April 2011 06:49 [Source: ICIS news]
By Fanny Zhang
None of the major projects approved have successfully started commercial operations in the country, they said.
“High pollution and technology hurdles are [the] biggest challenges. Due to immature processing technology, some plants could not even be stated up after being built,” said Xiao Hui, an analyst at Shenzhen-based broker China Huatai United Securities.
“That’s why all such projects are increasingly difficult and time-costing to get permits,” Xiao said.
NDRC also centralised approval of these projects, stripping local governments of such power.
A coal-based olefin plant must at least have a 500,000 tonne/year capacity, while a 1m tonne/year limit is set for coal-to-methanol, coal-to-methyl tertiary butyl ether (MTBE) and coal-to-liquids facilities.
For coal-to-natural gas projects, the capacity must be at least 2bn cubic metres/year, while a coal-to-monoethylene glycol (MEG) plant must at least have a 200,000 tonne/year capacity, according to NDRC.
The stricter rules are aimed at ensuring efficient use of coal resources, as well as curbing methanol overcapacities, industry sources said. China's total coal reserves as at end-2009 stood at 5,570bn tonnes, based on official data.
“To limit coal chemicals is a good thing, at least for the methanol industry. There’s heavy excess of methanol capacity,” said Xiao at Huatai United Securities.
Meanwhile, adopting the technology of extracting petrochemicals from the cheapest fossil fuel available also poses environmental risks, which may endanger
“Currently, only coal-to-methanol has [a] relatively mature technology. Plants [that convert] methanol to chemicals like olefin and MEG [and others] suffered unstable operation and quality problems on products,” said an official from Shenhua Group,
The group’s own 600,000 tonne/year methanol-to-olefins plant in
Shenhua has another project – a joint venture project with US’ Dow Chemical – in Yulin, Shaanxi province, which is pending NDRC approval, said the source.
The project, which hopes to produce 3m tonnes/year of methanol to yield 1.2m tonnes/year of olefin, meets the government’s requirement on project scale, the source said.
The partners are planning to kick off construction within the year if the government allowed them to proceed with the project.
“We see that the government’s stance is turning harder. So, there’s possibility that our projects will be rejected,” said the source from Shenhua Group.
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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