Outsourced Methanol-to-Olefins and Feedstock Solutions   

Currently, China still needs to import great quantities of olefins and their derivatives to meet growing demand although the nation continues to raise refining capacity through building new integrated petrochemical complex and expanding current plants.
   Coal-to-olefins (CTO) has become a significant direction for China's chemical players to produce olefins and meet the domestic needs. The commercial operation of Shenhua Baotou coal-to-polyolefin project has proven the technical viability of CTO process. In addition, Chinese producers manufacture olefins via outsourced methanol, which is a new option to make olefins.
   According to ASIACHEM, if all announced outsourced methanol-to-olefins (OMTO) projects would be built on-schedule before 2015, China might increase 15 million tons of additional demand for methanol per year. The announced OMTO projects in China are listed in the following table.
    ASIACHEM thinks that if these OMTO projects are implemented, plus planned projects in the coastal areas, the current methanol import of 5 million - 6 million tons per year can not meet the growing methanol demand. China's methanol import increase will have impact on the methanol markets in the Middle East and Asian areas in the future.
  The OMTO projects have relatively low CAPEX compared with the domestic CTO projects on the same scale, with relatively low water consumption and reduced carbon dioxide emission. This is in line with the energy conservation & emission reduction policy in China.
   Reportedly, China's methanol capacity reached 38 million t/a by the end of 2010, the output was 15.74 million tons, wit a running rate below 50%. As the OMTO projects will be fed with partially China-made methanol, they will help to relieve the pressure of methanol oversupply in the Chinese market.
   The nation previously announced a plan in 2006 to build a methanol transmission pipeline from Hulunber (Inner Mongolia) to Jinxi (Liaoning province). The plan is delayed to now.

OMTO Projects     (kt/a, kt, as of March 2011)
Company    Location    Olefins    Capacity    Methanol Demand    Status
Sinopec    Puyang, Henan    200    600    under construction
Ningbo Heyuan    Ningbo, Zhejiang    600    1 800    under construction
Zhejiang Xingxing    Jiaxing, Zhejiang    600    1800    planned
Dalian Fujia    Dalian, Liaoning    2 400    7 200    planned
Jiangsu Shenghong    Lianyungang, Jiangsu    1 200    3 600    planned
Total        5 000    15 000    
Source: ASIACHEM