Dow plans Chinese coal-to-chemicals venture

Midland, Michigan -- Dow Chemical Co. and Chinese coal mining and energy group Shenhua Group are to jointly establish a world-scale coal-to-chemicals complex in Shaanxi Province, China, the companies have announced.

Under a deal signed 14 May, the partners will carry out a two-year feasibility study for a facility based on clean coal technologies. This will convert coal to methanol, which will be used to produce ethylene and propylene – feedstock for various chemicals and polymers.

The proposed complex will include a chlor-alkali unit to support the production of 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.

According to Dow, 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.

“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,” said Andrew Liveris, chairman and CEO of Dow.

The project “will form a commercially competitive industry, which will have a positive impact on the local economic growth,” according to Chen Biting, chairman of Shenhua.

US chemicals giant Dow has annual sales of $49 billion and employs 43,000 people worldwide. State-owned Shenhua is the sole large-scale energy company in China, with integrated businesses ranging from coal, power, railway, port to coal liquefaction.

With 148,000 employees, the Chinese group is targeting coal production capacity of 300 million tonnes and an installed power plant capacity of 30,000 MW, by 2010.