HANGZHOU (ICIS)--China’s Zhejiang Tiansheng Holding Group plans to start commercial production at its methanol-based 500,000 tonne/year monoethylene glycol (MEG) plant at the end of 2012, a company source said on Friday.
It will be located at Ningbo Industry Zone in eastern China’s Zhejiang province and will be the world’s first MEG plant to use methanol-made olefins as feedstock, the source added.
The project, under the name of Ningbo Heyuan Chemical, will include a new 300,000 tonne/year polypropylene (PP) unit, he said. Ningbo Heyuan is a subsidiary of Zhejiang Tiansheng.
The project has two production phases: methanol to olefins (MTO) and olefins to MEG and PP.
“We have obtained technical licences from [China’s] Luoyang Engineering for the MTO process and from Shell for the olefins to MEG/PP process,” the source said.
Zhejiang Tiansheng is investing a total of yuan (CNY) 5.8bn ($884m). Earlier this year, the group had already secured a bank loan of CNY3.8bn from four local banks, the source said.
“We started construction of the project in June last year and hopefully we could achieve full production in end 2012,” the source said.
Over 60% of the MEG production will be fed into Zhejiang Tiansheng’s own subsidiary polyester plant at Shaoxing in Zhejiang province. It runs a 400,000 tonne/year polyester yarn facility which is expected to be expanded to 900,000 tonnes/year in June-July 2011.
The rest will be offered to the open market, the source added.
“We don’t worry about the procurement of feedstock methanol as there is plenty of supply from the Middle East,” he said, adding that the company is considering methanol imports from Kuwait.
MEG is a major raw material in the production of polyester yarn and fibres.
In Asia, MEG supply is expected to remain tight in 2011/12 because of limited capacity expansion in the region and an expected strong growth in China’s downstream polyester yarn and fibre industry.
($1 = CNY6.56)