Donghua Technology signs the EPC general contract for the pilot plant project of direct synthesis of olefins from syngas (FTO)

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Donghua Technology signed the EPC general contract for the pilot plant project of direct synthesis of olefins from syngas (FTO). Author/Source: Yaha Coal Chemical Industry. Date: July 5, 2019. Clicks: 50. On July 2, 2019, Donghua Engineering Technology Co., Ltd. and Shanghai Ruican Energy Technology Co., Ltd. (hereinafter referred to as “Shanghai Ruican”) finalized the EPC (design, procurement, construction) general contract for the pilot plant project of direct synthesis of olefins from syngas at Shanghai Ruican Energy Technology Co., Ltd., after both parties stamped the document to give it legal effect. Donghua Technology is responsible for all the tasks and services specified in the contract for this EPC project, including engineering design, procurement of equipment and materials, as well as construction and installation work ； The total amount under the general contract is 108,089,600 yuan, of which 4,500,000 yuan is allocated to engineering design costs, and 3,850,000 yuan to the costs associated with preparing the process package ； The construction period is approximately 12 months. Shanghai Rui Carbon was established in December 2018. It is a company of the type other limited liability company, with a unified social credit code of 91310117MA1J3AAJ94. The legal representative is Mr. Sun Yuhan, and the registered capital is 290 million yuan. The company’s address is No. 301, Rongle East Road, Songjiang District, Shanghai. Its business scope includes technology development, technical consultation, technical services, and technology transfer in the field of energy technology. Shanghai Rui Carbon is a project company established by our company, Shanghai Lianhe Investment Co., Ltd., Shanxi Lu’an Mining (Group) Co., Ltd., the Shanghai Institute of Advanced Studies of the Chinese Academy of Sciences, Shanghai Sarei Low-Carbon Energy Partnership, Shaanxi Coal and Chemical Technology Research Institute Co., Ltd., and Yangquan Coal Industry (Group) Co., Ltd., with the aim of expanding the field of projects related to the direct production of olefins from syngas (hereinafter referred to as “FTO”). Details regarding the establishment of Shanghai Rui Carbon can be found in the announcement titled \"Announcement on Related Party Transaction Involving Investment in Shanghai Rui Carbon Energy Technology Co., Ltd.\" published in the Securities Times on October 23, 2018, as well as on the Juchao Information Network (Donghua Technology 2018-060). Main terms of the contract: 1. Entry into force: The contract comes into effect officially upon signature by the legally authorized representatives of both parties and subsequent stamping by both sides. 2. Construction scale: 5,000 tons per year pilot plant. 3. Scope of work: The scope of the general contract includes the engineering design, procurement of equipment and materials, construction and installation, and personnel training for the pilot plant project for direct synthesis of olefins from syngas (FTO) at Shanghai Ruican. It also involves providing technical guidance, support, and services to assist Shanghai Ruican with tasks such as joint commissioning, trial operation with feedstock, performance testing, and acceptance of the installed facility. 4. Contract price and payment: The total amount of the general contract is 108,089,600 yuan, of which 4,500,000 yuan is for engineering design services and 3,850,000 yuan is for the preparation of the process package. The contract advance payment is 10% of the total contract value, to be paid by Shanghai Ruican within 7 days after the contract comes into effect ； Payments for project progress, equipment and materials, etc., shall be made by Shanghai Rui Carbon in accordance with the time, conditions, and proportions specified in the contract. 5. Construction period: The target handover date is 12 months after the contract comes into effect. 6. Responsibilities of both parties: Shanghai Ruican shall provide water, electricity, and internet for construction, as well as a suitable site, access roads, and necessary support ； Provide the basic data required during project implementation ； Pay the contract price in a timely manner as stipulated in the contract. The company shall, in accordance with the contract requirements, complete all tasks specified in the contract and ensure that Shanghai Rui Carbon retains ownership of the equipment specified in the contract ； The existing laws, regulations, and rules that are applicable to this project shall be complied with, and the work shall be carried out in accordance with and by making use of good industry practices as well as one’s own knowledge and engineering experience. This contract also stipulates matters such as liquidated damages and damages for losses, insurance, confidentiality, force majeure, and dispute resolution.