Sinopec bolsters coal-to-chemicals investments in China

Sinopec will take over the 800-ktpa coal-to-olefins (CTO) project in Erdos from State Power Investment Mengxi Energy.

Commenting, Kelly Cui, Wood Mackenzie Senior Consulting Manager, said: "Sinopec’s action marks its continued investment in coal-to-olefins, after bringing online four commercial units. The Erdos project will be the largest single CTO unit in China. Sinopec has its own intellectual property rights technology, S-MTO. This process has brought and will bring cost advantages to the company’s CTO plants.

"The project will cost RMB23.8 billion - US$3.4 billion - to produce 2.20 Mtpa of methanol, 340 ktpa of polyethylene and 530 ktpa of polypropylene. Additionally, the Erdos project will use Sinopec's own S-MTO technology, which consumes around 2.75 tonnes of methanol to produce one tonne of olefins.

"The government approved the project in August 2016 when it was still owned by State Power Investment Mengxi Energy. This approval is valid until 15th August 2019.

"Total was previously linked with participation in 2010, when it signed an MOU with China State power Investment Group. However, Total withdrew from the project after several years of negotiations.

"While other companies are reluctant to invest in CTO projects, either due to high capital investment concerns or stricter environmental protection regulation, Sinopec is profiting from its two CTO units at the Zhongtian Hechuang plant. By investing in CTOs, Sinopec is diversifying its olefin production route from traditional steam cracking."