Chinese Mandarin - Dow, Shenhua closer to clean coal plant

BIZCHINA / Overseas Investment

Dow, Shenhua closer to clean coal plant

By Jiang Jingjing (China Daily)
Updated: 2007-05-16 08:30

Domestic coal mining giant Shenhua Group and US-based Dow Chemical
Company have signed a cooperation agreement and announced plans for a
feasibility study, bringing the two a step closer to building a
world-class coal-to-chemicals complex in Northwest China's Shaanxi
Province.

The project will use "clean coal" technologies that convert coal to
methanol to produce ethylene and propylene, the building blocks of
various plastics and chemical products.

The complex will include a chlor-alkali unit, enabling the production of
caustic soda, vinyl chloride monomer and chlorinated organics. Other
derivatives planned for the complex include glycols, amines, solvents,
surfactants, acrylic acid and propylene derivatives.

The feasibility study will encompass environmental impact assessment,
water supply, front-end loading engineering design, market and product
mix, logistics and supply chain, and economic evaluation.

The study is expected to take approximately two years. The two companies
will then compile a project application report and submit it for
government approval.

"We are delighted to see the project moving to the next phase with
Shenhua," said Andrew Liveris, chairman and CEO of Dow. "This project
aligns with Dow's strategy to invest in growth geographies like China,
and will build Dow's competitive position to serve customers in Asia with
locally produced products and solutions."

Chen Biting, chairman of Shenhua Group, said producing oil substitutes
converted from coal is of great significance to China and the world. "The
coal chemical plant will make full use of the advantages of the two
companies. This project will form a commercially competitive industry,
with a positive impact on the local economic growth."

Dow officials promised that workers and communities in Shaanxi will
benefit from a safe, high-standard production facility as Dow will bring
its advanced know-how in environmental protection, worker safety and
energy efficiency to the joint venture.

The success of this project will provide China a new and viable way to
produce chemical products from its indigenous coal and salt resources,
helping it to reduce its reliance on oil imports and maintain sustainable
growth, said Liveris.

(China Daily 05/16/2007 page14)

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