Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC

China's CAS plans gas-to-methanol plant on US West Coast

BEIJING (Reuters) — China's CAS Holdings, an investment arm of China's Academy of Science, is looking to put $2 B into turning natural gas into methanol on the US West Coast and shipping the fuel to Chinese factories and chemical makers, Chinese executives said.

Wu Lebin, chairman of CAS Holdings, told Reuters last week the venture is part of a plan his company is leading to build a supply chain for methanol, potentially China's next alternative industrial and transport fuel.

The project, to be located at Kalama Port in the US state of Washington on the Columbia River, has applied for state and federal government permits, said a separate CAS official, without giving a timeline on when the approvals are expected.

An engineering unit of China National Petroleum Corp (CNPC) is carrying out front-end engineering design work for two 1.8 MMtpy gas-to-methanol lines that will cost about $2 B, said Zhang Laiyong, a vice president of the unit, China Huanqiu Contracting & Engineering Corp.

The Kalama project could offer the world's second-largest oil consumer another alternative low-carbon fuel and further diversify its fuel choices.

Wu acknowledged, however, that opposition from local environmentalists worried about carbon emissions has caused several delays in launching the project, developed by CAS unit Shanghai Bi Ke Clean Energy Technology Co Ltd (CECC).

Initially, CEEC will begin with a 600,000-tpy plant, using ultra-low emission technology, Wu said, adding that methanol shipped from the US West Coast will be cheaper than that produced in western China from coal.

"We picked Kalama because of its access to the best abundant gas supplies from both America and Canada, and it's a third closer to China compared to the Gulf of Mexico," he said.

China is the world's largest consumer of methanol as a chemical feedstock, and CAS already operates an $1.2 B, 1.3 MMtpy plant in east China that makes olefins from methanol.

CAS also wants to drive use of methanol as a transportation fuel for cars and ships. Transport consumption, though, is tiny compared with gasoline and diesel, with greater usage held up because national standards have not been set for methanol use and concerns over safety and tax issues.

Kalama could also feed millions of industrial boilers under a government plan to cut down coal use, with Beijing-Tianjin-Hebei region alone able to consume 10 MMt to 12 MMt of methanol a year, said Zhang Zhiyuan, chief scientist of Shenzhen Zhenghe Energy Co, a developer of boiler fuels.

Automaker Geely Auto has led China's push to use methanol in cars, with one plant able to make 100,000 units a year in northern Shanxi province.

A factory that can make 300,000 methanol-fueled cars a year is due online at end-2018 in southwestern Guizhou province, said Jin Xianyang, a senior Geely engineer.

Reporting by Chen Aizhu; Editing by Tom Hogue

Copyright © 2018. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


Editorial comment
-Adrienne Blume
According to GIIGNL’s 2018 Annual Report, global LNG trade expanded by 3.5 Bft3d in 2018, to 38.2 Bft3d—a record 10% increase.
Power, LNG projects drive pipeline construction in Africa
-Shem Oirere
Increasing public investment in gas-fired power plants in Africa, the continuing recovery in global oil prices and persistent insecurity in key producer markets, such as Nigeria, are likely to impact gas transmission pipeline projects on the continent, even as more international companies express interest in the region’s stranded gas resources.

Maximize Profitability with Advanced Analytics at Natural Gas Processing Plants

View On-Demand

Incorporating economic data into process modeling is key to optimizing operations and maximizing profits at gas processing plants. However, maintaining optimal operations are often challenging due to changing market dynamics, contract structures and increasing process flexibility. Today, gas processors are leveraging Predictive Control and First Principles models to accurately determine and control the optimal operating targets in real time based on the most current plant conditions and profitability, optimizing recovery of natural gas liquids. Learn how real-time analytics, combined with decision support tools, empower companies to:
•Improve processing margins by up to 5%
•Maximize NGL production through improved availability and optimized process conditions
•Improve compositional control to operate closer to product specifications

May 22, 2018 10am CDT

View On-Demand


Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2018 Gulf Publishing Company.