Dow and Shenhua Consider Building Coal-to-Chemicals Plant in China

The Shenhua Group (Shenhua) and The Dow Chemical Company (Dow) today will sign a cooperation agreement and announce plans for a detailed feasibility study, bringing the two parties one step closer to building a world-scale coal-to-chemicals complex in Shaanxi Province, People’s Republic of China.

“We are delighted to see the project moving to the next phase with a great partner like Shenhua, which is truly a global leader in coal mining,” said Andrew Liveris, chairman and CEO of Dow. “This project aligns with Dow’s strategy to invest in growth geographies like China, and will build Dow’s competitive position to serve customers in Asia with locally produced products and solutions.”

Chen Biting, chairman of Shenhua Group, said, “It is of great significance for the world to produce the oil substitute converted from coal and it is the case for China in particular, The building of the world scale coal chemical plant jointly with Dow will make full use of the respective advantages of the two companies. This project will form a commercially competitive industry, which will have a positive impact on the local economic growth.”

The project will use “clean coal” technologies that convert coal to methanol to produce ethylene and propylene, the building blocks to make various plastics and chemical products. The complex will include a chlor-alkali unit, enabling the production of products such as caustic soda, vinyl chloride monomer and chlorinated organics. Other derivative products being planned for the complex include glycols, amines, solvents, surfactants, acrylic acid and derivatives and propylene derivatives.

The feasibility study will encompass environmental impact assessment, water supply, front-end loading engineering design, market and product mix, logistics and supply chain, and economic evaluation. The feasibility study is expected to take approximately two years. The two companies then will compile a project application report based on the completed positive feasibility study and submit that to the Chinese government for approval.

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