According to the data from China Petroleum & Chemical Industry Association (CPCIA), China’s ethylene production capacity was 10.25 Mt and ethylene equivalent import was nearly 10 Mt in 2008. Along with the large scale ethylene projects, like PetroChina Dushanzi, Sinopec Zhenhai and Sinopec Tianjin will be start up during 2009 and 2010 successively.
As predicted by CPCPA, the growth rate of China ethylene capacity may reach 4.9% and 5.6% in 2011-2016 and 2016-2021 periods respectively. Nevertheless, China’s ethylene production still can not meet the demand of downstream market as only 56.4% of the demand will be supplied by local producers in 2010 and 62.1% in 2020. The big gap attracted more interests from investors on CTO projects.
Three Chinese CTO projects, namely Datang Duolun, Shenhua Baotou and Shenhua Ningxia Coal, are under construction. And other big players are also seeking opportunity to develop projects.
In February 2009, Shenhua Baotou 1.8Mt/a coal-based methanol to 600kt/a olefins project was listed in China’s Petrochemical Stimulus Package. On February 4th, Anhui Huaihua Group got the environmental impact assessment report on a coal-based 1.7Mt/a methanol to propylene project from the Ministry of Environment Protection. Besides, a 10 kt/a industrial pilot unit of fluidized bed methanol to propylene (FMTP) process, jointly developed by China National Chemical Engineering Group Corp (CNCEC), Tsinghua University and Huaihua Group is keeping on test operation.
In Mar. 2009, Dow Chemical announced that the company and Shenhua Group will jointly finalize the feasibility study report on a 3 Mt/a coal-based methanol to 1Mt/a olefins project in Yulin Shaanxi.
In Apr. 2009, Sinopec dispatched a delegation to visit Puyang, Henan and held a meeting with local authority to discuss the location for a 1.8Mt/a Methanol-to-Olfeins (MTO) project. In May, a Sinopec expert team prepared the “Sinopec Bijie Zhijin Coal, Phosphor, Power, Chemical Integration Base Planning” for Guizhou Province, including a 1.8Mt/a methanol and following olefin/polyolefin units to be built during phase I construction.
In May 2009, Shaanxi Yanchang Oil Group, ChinaCoal Group and Thailand New Energy Chemical Investment Group signed a agreement for the proposed 4:3:3 jv to develop coal-to-olefins project in, Jinbian, Shaanxi. Scale of 1st stage will include 1.8Mt/a methanol unit, 600kt/a MTO unit, 1.5Mt/a heavy residue pyrolysis, 600kt/a PP and 600kt/a PE units.
On Jun. 2009, Huaneng Manzhouli Coal Chemical Company held an assessment on feasibility study report of a 600kt/a methanol to 200kt/a olefins project. The project was earlier approved by authority of Inner Mongolia Autonomous Region in Mar. 2009
Based on ASIACHEM’s data, China ethylene and propylene equivalent gap will reach 9600,000 and 3400,000 tons respectively in 2010. The shortage of supply-demand will be supplemented by imported derivatives, like polyethylene, polypropylene and MEG etc. Three Coa-to-olefins (CTO) projects including Datang Duolun, Shenhua Baotou and Shenhua Ningxia are expected to be on-stream successively in 2009 and 2010, then the total olefins capacity will reach 1.7 Mt/a.
Besides those mega CTO projects developed at coal producing regions, ASIACHEM suggests building medium size MTO projects in chemical industry parks located in east and south China provinces. Such olefin units of 200~300kt/a capacity and based on the cheap imported methanol shall be built to meet the demand on ethylene and propylene by downstream producers in these chemical parks.