China’s latest craze – methanol-to-olefins

By Malini Hariharan

A methanol-to-olefins (MTO) wave is gripping China and projects are set to multiply even as questions persist on their economic viability.

Popularity of this technology has grown since the successful commissioning of Shenhua Baotou’s plant earlier this year and many mid-sized Chinese chemical companies have queued up to implement projects.

shenhua baotou.jpg
Pic source: Dalian Institute of Chemical Physics

The blog recently interacted with one such company and was bemused by its determination to build an MTO plant in a coastal province with no easy access to coal or methanol.

“We have already got the MTO technology from the Dalian Institute of Chemical Physics; we just need to find the methanol,” said one source from a company based on the east coast.

But finding the methanol will not be easy. The company has planned a 600,000 tonnes/year MTO project which would mean importing 1.8m tonnes/year of methanol – the annual output of one mega-methanol plant.

And though China has sufficient methanol on paper, procuring product locally was not being considered because of logistics issues (most plants were located inland) and inconsistent operations.

The logic for the MTO project was simple – the company, which manufactures ethylene oxide and its derivatives, wanted to produce enough ethylene to take care of its captive requirement while the propylene would be sold locally.

Backward integration makes sense in many cases. But how would an MTO unit help this company? Would it not be better to import a few hundred thousand tonnes of ethylene rather than nearly two million tonnes of methanol? And would an MTO project based on imported methanol be economically viable?

But the company’s determination was clearly evident as various alternatives to get to the methanol were being evaluated. “We are confident we will be able to do it,” said the source.

After this recent conversation the blog decided to compile a list of MTO projects (china coal chemical projects.xlsx) and identified 11 companies with ambitions to go down this route. The blog will not be surprised if many more follow next year.

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