China's CAS Holdings, an investment arm of China's Academy of Science, is looking to put $2 billion into turning natural gas into methanol on the U.S. West Coast and shipping the fuel to Chinese factories and chemical makers, Reuters reported, citing Chinese executives.
Wu Lebin, chairman of CAS Holdings, told Reuters 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 U.S. 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 million tonne-per-year gas-to-methanol lines that will cost about $2 billion, 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.
However, 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 U.S. 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 8 billion yuan ($1.2 billion), 1.3 million-tpy plant in east China that makes olefins from methanol.
(Writing by Jessie Jia Editing by Harry Huo)
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