New coal chemical projects are set to commence construction; trillion-dollar business opportunities are emerging

Thread Content

Following the order to impose strict approval processes on coal chemical projects during the 11th Five-Year Plan period, the construction of new coal chemical projects will accelerate during the 12th Five-Year Plan period. Reporters learned yesterday that a coal chemical project with an investment amount of nearly one trillion is currently under review by the Development and Reform Commission, and the results of most of the approvals are likely to be announced in September. In July, this newspaper reported under the headline “Plan for deep coal processing expected to be released; a boom in the coal chemical industry is imminent” that the **National Development and Reform Commission was drafting the ‘Plan for Demonstration Projects on Deep Coal Processing’ (hereinafter referred to as the Plan). A senior figure in the coal chemical industry told reporters yesterday that the 15 demonstration projects listed in the **Plan are precisely the 15 new coal chemical projects under review by the National Development and Reform Commission. These projects cover areas such as coal-to-natural gas, coal-to-olefins, and coal-to-oil. Coal-to-natural gas projects include: the 5.5 billion cubic meter project invested by Qinghua Group in Yili, Xinjiang ； Projects invested by Xinwen and China Power Investment in Yili, Xinjiang ； A project carried out in Zhundong, Xinjiang, led by Sinopec in collaboration with Huaneng, Yankuang, Longyu Energy, Lu’an, Shenhua, China National Coal Group, and the Xinjiang Production and Construction Corps (it is said that the number of such projects could be seven or eight) ； The project with a production capacity of 4 billion cubic meters carried out by Guodian in Xing’an League, Inner Mongolia ； A project carried out by SDIC Xinji and power companies in Huainan, Anhui. Coal-to-oil projects include those carried out in western Inner Mongolia, including those by Lu’an ； Projects carried out by Yankuang and Yanchang Chemical Construction in Yulin, Shaanxi ； The project with an annual production capacity of 5 million tons carried out by Shenhua Ningxia Coal Industry in Ningxia. Coal olefins include the projects carried out in Ordos, Inner Mongolia, including those by Zhongtian Hechuang ； The project carried out in Shaanxi by Shenhua, Shanxi Coal, and Dow together ； Sinopec’s projects in Guizhou ； Projects carried out in Henan by Henan Coal Industry and Sinopec. It is reported that some of the aforementioned projects were submitted for approval long ago, but due to the NDRC’s strict regulations on the approval of coal chemical projects starting in July 2006, they have yet to receive the necessary approval. Recently, the **Development and Reform Commission has been accelerating the approval process for coal chemical projects. This is because the new coal chemical demonstration projects launched during the 11th Five-Year Plan period have been operating successfully, and such efforts will continue in the 12th Five-Year Plan period. Additionally, the sluggish economy may also prompt the NDRC to speed up approvals. Reportedly, the Lu’an 1-million-ton coal-to-oil project has received the necessary approvals. The Ningxia Coal-to-Oil project was also approved shortly after. The new coal chemical industry demonstration projects focus on coal-to-natural gas, coal-to-olefins, and coal-to-oil. On the one hand, China has made breakthroughs in the production technologies for these products; on the other hand, high oil prices and the need for energy substitution also drive the development of the coal chemical industry in China. “During the 11th Five-Year Plan period, China’s demonstration projects for coal-to-natural gas, coal-to-olefins, and coal-to-liquids operated smoothly. The commencement of new coal chemical projects has a evident effect on boosting investment. Industry insiders believe that the total investment in coal chemical projects during the 12th Five-Year Plan period will exceed one trillion yuan, comprising projects approved by the National Development and Reform Commission as well as those approved by local development and reform commissions. Starting in the second half of 2012, China is expected to enter a peak period for investments in coal chemical industry.