Investing 3.56 billion yuan: Guanghui plans to build a 400,000-ton ethylene glycol production facility

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Investing 3.56 billion yuan: Guanghui plans to build a project for producing 400,000 tons of ethylene glycol. Author/Source: Chemical Industry Network – Coal Chemicals. Date: 2019-03-27. Clicks: 25. Recently, Guanghui Energy Co., Ltd. issued a announcement regarding its holding subsidiary, Hami Guanghui Environmental Protection Technology Co., Ltd., which plans to invest in a project to produce 400,000 tons of ethylene glycol per year by making use of waste gas generated in its operations. It is reported that Guanghui Energy and Nanjing Sansheng Logistics Co., Ltd. jointly invested in establishing a holding subsidiary, Hami Guanghui Environmental Protection Technology Co., Ltd., with Guanghui Energy holding 95% of the shares. The total planned investment for this project is 355,980 million yuan, and it will be constructed in the Naomaohu Industrial Park, Yiwu County, Hami Region, Xinjiang. The project uses the waste gas generated as a by-product of the 10 million tons per year coal grading, upgrading, and comprehensive utilization project, which was built by the holding subsidiary Xinjiang Guanghui Coal Clean Refining Co., Ltd., as raw material. Through conversion and gas purification and separation devices, pure carbon monoxide and hydrogen are obtained, which are then used to produce ethylene glycol via the oxalate method. The project is constructed in two phases, with each phase having a capacity of 200,000 tons per year of ethylene glycol, resulting in an overall designed capacity of 400,000 tons per year of ethylene glycol. Project Background: Guanghui Energy Co., Ltd. possesses abundant coal resources in the Namao Lake area of Hami. The quality of this coal is excellent; it is a type of coal with extremely low sulfur and phosphorus content, as well as high calorific value, and it is rich in oil and has a long burning time – making it an ideal coal for use in the chemical industry. Guided by the **Western Development Strategy, as well as the autonomous region’s strategies for transforming its resource advantages and promoting new types of industrial development, Guanghui Energy has actively pursued the development of the clean energy industry. Since 2002, it has invested hundreds of millions of yuan in the Naomaohu area of Yiwu County in Hami, Xinjiang, to build facilities capable of producing 1.2 million tons of coal-based methanol per year, 600 million cubic meters of LNG, as well as systems for the comprehensive processing and upgrading of 10 million tons of coal per year. This has led to the establishment of a new model for the development of the coal chemical industry. In view of the following: 1. The existing clean refining projects generate large amounts of waste gas, which is inexpensive; it is currently mainly used for boiler combustion, with a portion being used for hydrogen production via PSA (under construction), and these resources are not being utilized in a scientific and effective manner. 2. The proposed project is located in the Guanghui Naomaohu Industrial Park in Xinjiang. The existing coal chemical plants in this area already have well-developed infrastructure for water supply and drainage, sewage treatment, gas supply, heating, power supply, and communications. Most of the utility systems and auxiliary facilities required for the new project will be utilized from the existing plants, with some being newly constructed; this approach helps to minimize investment and operational costs while improving the efficiency of use of the existing utilities. 3. Ethylene glycol is a very important basic organic raw material in the petrochemical industry; it is primarily used in the production of polyester fibers, antifreeze agents, unsaturated polyester resins, lubricants, plasticizers, non-ionic surfactants, as well as in industries such as coatings and inks, offering a wide range of applications. Currently, there is a significant shortage in China’s ethylene glycol market, and the self-sufficiency rate is low; therefore, the market will continue to rely heavily on imports for a long time to come. Against this backdrop, Guanghui Energy and Nanjing Sansheng Logistics Co., Ltd. jointly invested in establishing a holding subsidiary, Hami Guanghui Environmental Protection Technology Co., Ltd., with Guanghui Energy holding 95% of the shares. The plan is to invest in a project for the comprehensive utilization of waste gas to produce 400,000 tons of ethylene glycol per year. This project will use the waste gas generated as a by-product of the 10 million tons per year coal upgrading and comprehensive utilization project carried out by the holding subsidiary, Xinjiang Guanghui Coal Clean Processing Co., Ltd., as well as excess high-pressure steam and other utility resources. By doing so, it will be possible to make effective use of the components in waste gas, extend the downstream product chain, and increase the added value of the products. At the same time, it will also help to increase the utilization rate of the existing utility facilities at the clean processing company, thereby boosting the returns on its assets. Furthermore, low raw material costs can ensure a cost competitive advantage for the ethylene glycol project, contributing greater economic benefits to the company. Information on the investor: Company name: Hami Guanghui Environmental Protection Technology Co., Ltd. Registered capital: 50 million yuan, of which the company itself has committed to contributing 47.5 million yuan, accounting for 95% of the total registered capital ； Nanjing Sansheng Logistics Co., Ltd. has subscribed to a capital contribution of 2.5 million yuan, accounting for 5% of its registered capital. Legal representative: Zhang Jiao. Business address: No. 1 Xingye Road, Naomaohu Town, Yiwu County, Hami City, Xinjiang. Business scope: Comprehensive development of waste gas utilization, as well as the production and sales of chemical products such as ethylene glycol, ethanol, light alcohols, heavy alcohols, mixed alcohol esters, and dimethyl oxalate (excluding hazardous substances and drugs that can be easily used for drug production; business activities that require approval according to law may only be carried out after obtaining permission from relevant authorities). Basic Information on the Investment Project (I) Project Overview: The project uses waste gas generated as a by-product of clean refining companies as raw material. Through conversion and gas purification and separation units, pure carbon monoxide and hydrogen are obtained, which are then used to produce ethylene glycol via the oxalate method. The project is constructed in two phases, with each phase having a capacity of 200,000 tons per year of ethylene glycol, resulting in an overall designed capacity of 400,000 tons per year of ethylene glycol. Construction location: Naomaohu Industrial Park, Yiwu County, Hami Region, Xinjiang. The main product of this project is ethylene glycol, while the by-products include dimethyl carbonate, crude ethanol, mixed alcohol esters, crude ethylene glycol, and crude diethylene glycol. (II) Project construction period: The project is planned to be carried out in five main phases: design, procurement, civil construction, installation, and commissioning for operation. The construction period for Phase 1 is 1.5 years, while that for Phase 2 is 1 year. According to available information, Guanghui Energy has developed four main business segments: natural gas liquefaction, coal mining, coal chemical conversion, and oil and gas exploration and development. Its core products include coal, LNG, alcohols and ethers, coal tar, and petroleum, with energy logistics serving as a supporting element. It is the only private enterprise in China that possesses all three types of resources – coal, gas, and oil. Guanghui Energy’s financial report for 2018 shows that the company achieved revenue of 12.905 billion yuan during that period, a year-on-year increase of 58.58% ； The net profit attributable to the shareholders of the listed company was 1.744 billion yuan, representing a year-on-year increase of 166.83%.