China and Russia Companies to Jointly Construct Methanol Project

Recently, China Pingmei Shenma Group and Russia Irkutsk Petroleum Company signed a joint venture and cooperation agreement on the methanol and MEG project in Moscow, Russia. According to the agreement, both parties will jointly contribute to the construction of 300kt/a methanol and 600kt/a MEG project.

China Pingmei Shenma Group Lantian Chemical owns 400kt/a natural gas to methanol units, which stopped production in March 2014 due to the high cost. Russia Irkutsk Petroleum Company enjoys rich oil and gas resources but lacks processing projects. Large amounts of the associated gas from oil fields can only be burned through torches, and the company has to be fined by the Russian Federation every year.

After the negotiation, the two companies agree to jointly build the methane gas deep-processing project, which is divided into three phases with a total estimated investment of $1.8 billion. The phase I program is based on the reuse of the 400kt/a idle natural gas to methanol units of Lantian Chemical. Phase II and III programs will newly construct 600kt/a MEG unit and 1,200kt/a methanol unit matched with 600kt/a olefin unit.