Commodity resin giant Dow Chemical Co. of Midland, Mich., is looking into a large-scale coal-to-olefins joint venture in northwest China with the country's largest coal producer, Shenhua Group.
``We are exploring a program to convert coal to olefins,'' Dow spokeswoman Terri McNeill confirmed by phone. ``[We] have filed the agreement with Shenhua to study the feasibility of using coal gasification in a large-scale olefins plant.''
An agreement was signed in December 2004 by Jim McIlvenny, president of Dow Greater China, and Zhang Yuzhuo, vice president of Shenhua Group.
Started in the first quarter of 2005, the feasibility study is evaluating the potential and value of the project in areas around Yulin city. It covers areas such as economics and market analysis, logistics and technological applications.
Originally scheduled to conclude by the end of 2005, McNeill said the study is ongoing. She did not reveal further details. ``Essentially there hasn't been change [to be announced to the public] in the past six to eight months,'' she said.
Meanwhile, Beijing-based Shenhua Group slated in November the construction of another coal-to-olefins project in Yinchuan, in coal-rich northwest China's Ningxia Autonomous Region. Jointly funded by Shenhua and Ningxia Coal Group Ltd., the launch of the project was followed by the opening of a joint venture between the two in January. The coal-to-olefins facility, under construction since November, will begin operating by 2010 with a capacity of 1.15 billion pounds of olefins per year.
Shenhua Group was not immediately available for comment. Its subsidiary, China Shenhua Energy Co. Ltd., has been listed on the Hong Kong stock exchange since June.
The unit produced 122.1 million tons of coal last year, a 20 percent increase from 2004. Shenhua is the fifth-largest listed coal producer worldwide.