TBEA plans to invest over 17 billion yuan in total to build a coal-to-natural gas project in Zhundong with an output of 2 billion Nm^3 per year

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Total investment exceeds 17 billion yuan! TBEA Plans to Build a Coal-to-Natural Gas Project 2025-04-02 On the evening of March 31, TBEA announced that in order to make full use of the company’s coal resources, to achieve their clean and efficient utilization and to increase their added value, its subsidiary Tianchi Energy will invest in the construction of the Zhundong coal-to-natural gas project with an annual production capacity of 2 billion Nm^3. The total investment for this project is 17.04 billion yuan, with Zhuneng Chemical, a wholly-owned subsidiary of Tianchi Energy, serving as the main investor. 　　The announcement states that the construction scope of this coal-to-gas project includes a complete set of production facilities for converting coal into gas, substations, control rooms, laboratories, comprehensive office buildings and other utility systems and auxiliary production facilities, coal transportation and storage systems, as well as environmental protection facilities. The construction period for coal-to-gas projects is 3 years; production begins in the 4th year with a production capacity of 80%, and full capacity is achieved by the 5th year. 　　Of the total investment of 17.04 billion yuan, 16.48 billion yuan is allocated to construction costs, 99.57 million yuan to working capital for the initial phase, and 460 million yuan to interest during the construction period. The project’s capital contribution accounts for 50% of the total investment, amounting to 8.52 billion yuan. This amount will be covered by Tianchi Energy Company increasing its investment in Zhuneng Chemical Company, or through the introduction of strategic investors by Zhuneng Chemical Company; Tianchi Energy Company will finance this amount using its own funds and other sources ； The remaining 8.52 billion yuan for the other projects will be covered by Quanneng Chemical Company through bank loans or other means. 　　TBEA stated that the project is expected to process 5.7974 million tons of raw coal per year (of which 477,100 tons will be fuel coal (slurry coal) and 5.3203 million tons will be feedstock coal (crushed coal)), with a natural gas production capacity of 2.05428 billion Nm^3/year (of which 840 million Nm^3/year will be converted into LNG, amounting to 582,672 tons per year). Additionally, by-products such as coal tar, middle oil, crude benzene, and ammonium sulfate will be produced. The target markets for the natural gas produced by this project are those outside Xinjiang where demand for natural gas is high and prices are steep, such as North China and East China; transportation is carried out via pipelines ； The target customers for the liquefied natural gas produced by this project are mainly local enterprises. 　　The feasibility study report indicates that, assuming a construction period of 3 years, the project will begin operations in the 4th year with a production capacity of 80%, and full capacity will be achieved by the 5th year ； The economic service life of the project is 15 years, with an income tax rate of 25%. It produces 1.214 billion Nm^3 of synthetic natural gas (SNG) and 582,672 tons of liquefied natural gas (LNG) per year. Based on a coal price of 150–160 yuan per ton (including taxes, where fuel coal costs 150 yuan per ton and raw coal costs 160 yuan per ton), the annual profit of this project ranges from 960 million to 2.06 billion yuan, depending on the selling prices of SNG/LNG. 　　TBEA stated that the Xinjiang Uyghur Autonomous Region has included \"the integrated development of large-scale coal bases such as Zhundong and Hami, the steady advancement of the construction of strategic bases for coal-based oil and gas production, and the orderly development of the modern coal chemical industry\" in its 14th Five-Year Plan. The coal-to-gas project is in line with the ** and regional development strategies, and it falls within the areas that are encouraged for development by ** ； The implementation of this project helps to enhance the country’s self-sufficiency in oil and gas, reduce its reliance on imported oil and gas, and promote the clean and efficient use of coal resources. It is of great significance for accelerating local economic development and ensuring energy strategic security. 　　Therefore, TBEA believes that with the continuous growth in natural gas consumption, the products from the company’s coal-to-gas projects have good market prospects. TBEA stated that the implementation of its coal-to-gas project will enable it to fully leverage the benefits of energy industry clusters, extend the value chain of its coal business, optimize the structure of this industry, improve the efficiency of comprehensive coal utilization, create new sources of revenue, and enhance the overall profitability of its coal business – all in line with the company’s development strategy.