European Energy Firm Makes Deal For China Growth

Environmentalists should take note of a new energy venture between a foreign and domestic firm in China.

European petrochemical firm Total and the Chinese energy group China Power Investment Corporation announced their intention to build a coal-based petrochemical plant in China's Inner Mongolia.

Total will bring to this partnership its expertise in the Methanol to Olefins and the Olefin Cracking Process technology that Total Petrochemicals says it has tested extensively at its purpose-built semi-commercial plant in Feluy, Belgium. Total will also study solutions on how to capture and store CO2 using the know-how gained from its CCS pilot project in Lacq, France.

Following the signature of the LOU, both companies will now launch a feasibility study on a project of 1 Mt/year polyolefins production site, based on methanol produced from the gasification of coal. The investment for the plant, which is due to start production after 2015, is estimated at EUR2-3 billion.

The MTO technology allows the production of propylene and ethylene from methanol, which can be obtained from various feedstocks such as natural gas, coal or biomass. In combination with the OCP process, it allows a very high yield of polyolefin production.

CPI is one of the five biggest energy producers in China with a particularly strong position in coal mining and transformation of coal into energy.

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