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Total sanctioned by China to invest in a petrochemical plant scheme

15th January 2014

The French oil and gas company has gained approval by China's NDRC to invest in a project that involves converting coal into pertrochemical products

Total to get involved in coal to petrochemical conversion plant project

French oil and gas corporation, Total, has been approved by a Chinese commission to invest in a $4bn project to convert coal into petrochemical products in the northern province of Inner Mongolia, Reuters reported.

Total will be working with the China Power Investment Corporation to modify a 'coal-to-olefins' technology.

This machinery is currently undergoing tests at a pilot plant in Belgium.

The plant would essentially transform Chinese coal output into gas, before converting that into olefins and polymers.

A spokeswoman for Total told Reuters that the company received their authorisation from China's National Development and Reform Commission (NDRC), and the group is now involved in an in-depth study phase, with a planned start-up date scheduled after 2017.

She added that the “goal is to get a foot in a growing market.”

The plant will be designed to have production capacity of 800,000 tonnes per year of polyethylene, which is the most common plastic, used in plastic bags and bottles, along with polypropylene that is used in automotive parts and fabrics.

Total has been involved in discussions regarding the project for over three years, after a letter of understanding was signed in Paris between Total and CPI in November 2010.   

The majority of China’s coal production regions are situated mainly in Inner Mongolia and the Shaanxi Province.

At the end of 2012, Chinese coal manufacturing was estimated to be around 3.66 billion tonnes, which made up nearly half of its global trade.

Total and CPI, according to the Total spokeswoman, have not yet created a joint venture.

 

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