Hengyi Petrochemical plans to invest 26.7 billion yuan to build a project in Turpan for the production of 2.4 million tons per year of high-quality ethylene glycol derived from coal, to be used in fiber production”

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On the evening of May 15, Hengyi Petrochemical issued a announcement stating that its wholly-owned subsidiary, Hengyi Energy Technology (Turpan) Co., Ltd., plans to invest in the construction of a project to produce 2.4 million tons per year of high-quality ethylene glycol derived from coal, with an estimated total investment of 25.7 billion yuan. It is reported that the project will be constructed in the Coal-Based New Materials Recycling Industrial Park within the Turpan Economic Development Zone. The construction period is expected to be three years, with commissioning scheduled for the first half of 2028. The project scope includes the production of 2.4 million tons per year of high-quality ethylene glycol derived from coal for use in fiber production, along with the construction of necessary production units, auxiliary production facilities, and utility systems. It also involves supporting infrastructure for production services, such as gasification units, purification units, H2/CO separation units, ammonia synthesis units, nitric acid production units, DMO production units, ethylene glycol production units, and air separation units. It is reported that the funds for the construction of this project come from the company’s own assets and self-raised funds. Since 2026, the profitability of Hengyi Petrochemical’s various products has improved; the company’s net profit attributable to the parent company saw a significant increase in the first quarter of 2026. At present, the company enjoys stable and ample cash flow. With the subsequent improvement in the company’s performance and the expectation of conversion of the existing convertible bonds, the company’s debt-to-asset ratio is likely to decline further. At the same time, the company will further strengthen investment control to significantly reduce project investment expenditures. Therefore, investing in the construction of this project will not have a significant negative impact on the company’s operations and its debt-to-asset ratio, and the company will make every effort to accelerate the project’s progress. Hengyi Petrochemical stated that as global energy supply uncertainties increase, the integrity of the industrial chain and the ability to maintain control over it have become **important pillars of strategic security. Ensuring a safe and reliable supply of raw materials has become a top priority for enterprises, and the strategic advantages of coal-based chemical manufacturing are becoming increasingly evident. To ensure a stable supply of ethylene glycol, an important raw material for downstream polyester products, the company adheres to the **energy security strategy and plans for industrial transformation and upgrading. Taking into account its resource profile of **abundant coal and limited oil resources, it has made coal-based new materials a key strategic focus, using coal as a substitute for oil in the production of high-end chemical products. The company stated that launching the coal-to-ethylene glycol project in Xinjiang is not only a crucial step toward extending its reach upstream in the polyester industry chain and ensuring self-sufficiency and control over raw materials, but also a strategic move to diversify raw material sources, mitigate the impact of crude oil price fluctuations, and enhance the profitability resilience of the entire industry chain. Once the project is put into operation in the first half of 2028, Hengyi Petrochemical will achieve diversification in the sources of raw materials used for processing as well as integration of raw materials for product production. This will create a unique industrial framework in the industry, one that combines the use of oil, coal, and fabric simultaneously. By leveraging the advantages of vertical integration in the chain from coal resources to ethylene glycol and then to polyester production, the company will be able to reduce its reliance on crude oil alone. This approach will help enhance the stability and predictability of profits across the entire value chain, thereby significantly improving the company’s profitability and risk resistance.