China’s CAS plans gas-to-methanol plant on U.S. West Coast

China’s CAS Holdings, an investment arm of China’s Academy of Science, looks to spend $2 billion on a natural gas-to-methanol plant in the state of Washington, then shipping the fuel to Chinese factories and chemical companies, Chinese executives said.

Wu Lebin, chairman of CAS Holdings, told Reuters the venture is part of a plan his company is heading to build a supply chain for methanol, potentially China’s next alternative industrial and transport fuel, Kallanish Energy learns.

The project, to be located at Kalama Port in Washington, on the Columbia River, has applied for state and federal government permits, another CAS official told Reuters, without saying when approvals are expected.

An engineering unit of China National Petroleum Corp. is conducting front-end engineering design (FEED) work for two 1.8 million metric tonne-per-year, gas-to-methanol lines that will cost roughly $2 billion, Zhang Laiyong, a vice president of China Huanqiu Contracting & Engineering, told Reuters.

Wu acknowledged 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 Company Ltd. (CECC).

Initially, CEEC will begin with a 600,000 tonnes per year plant, using ultra-low emission technology, Wu said, adding methanol shipped from the U.S. West Coast will be cheaper than if 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 a $1.2 billion, 1.3 million-tonne-per-year plant in east China that makes olefins from methanol, Reuters reported.

Kalama could also supply millions of industrial boilers under a government plan to cut down coal use, with the Beijing-Tianjin-Hebei Region alone able to consume 10 million to 12 million tonnes of methanol annually, Zhang Zhiyuan, chief scientist of Shenzhen Zhenghe Energy, a boiler fuels developer, told Reuters.

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