Construction Imminent! Xinjiang 800,000-Ton Coal-to-Olefin Project

On August 26th, it was announced that Xinjiang Shanneng Chemical held the groundbreaking meeting for the methanol-to-olefins unit engineering general contract of the Zhungdong Wucaiwan 800,000-ton-per-year coal-to-olefins project, marking the official commencement of the substantial construction phase for the methanol-to-olefins unit.

It is understood that the methanol-to-olefins unit is responsible for the core task of converting methanol into high value-added olefin products and serves as the key hub of the coal-to-olefins project.

The public announcement released on April 8, 2025, shows the status of the winning candidates for the special tender of air separation technology, process packages, and complete equipment for the Xinjiang Shanneng Chemical Co., Ltd. Junggar Five-color Bay 800,000 tons/year coal-to-olefins project as follows:

The first winning candidate: Hangyang Group Co., Ltd., with a total bid price (excluding tax) of 670,738,185.00 yuan;

The second winning candidate: Linde Asia-Pacific Engineering Co., Ltd., with a total bid price (excluding tax) of 738,019,722.00 yuan.

The third winning candidate: Hangzhou FSD Cryogenic Equipment Co., Ltd., with a total bid price (excluding tax) of 652,444,481.55 yuan.

According to information released in August 2025, the Xinjiang Zhundong methanol-to-olefins (MTO), olefin separation, butene-1, and steam cracking units of Shanneng are engineered, procured, and constructed (EPC) by China Petroleum & Chemical Corporation Engineering Construction Co., Ltd.

Project Name: Xinjiang Shanneng Chemical Co., Ltd. Zhungeer Dong Wucaiwan 800,000 Tons/Year Coal-to-Olefin Project

Construction Unit: Xinjiang Shanneng Chemical Co., Ltd.

Location: Modern Coal Chemical Industry Demonstration Zone, Zhungeer Economic and Technological Development Zone, Xinjiang (West side of Shenqi Road at the entrance of Wucaiwan No. 4 Open-pit Mine, Huoshaoshan Industrial Park, Wucaiwan Mining Area)

Total investment: The total investment is 2,085,801.19 thousand yuan, of which 1.667 billion yuan is invested in environmental protection, accounting for 8.0% of the project construction investment.

Project Scale and Overview: This project uses coal from the Wucaiwan No. 4 open-pit mine as raw material. Through processes such as pulverized coal pressurized gasification, shift reaction and heat recovery, low-temperature methanol wash, and methanol synthesis, it produces MTO-grade methanol (intermediate product). The MTO-grade methanol is further processed through MTO and olefin separation to obtain polymer-grade ethylene and polymer-grade propylene monomers. Ethylene polymerization produces polyethylene products, and propylene polymerization produces polypropylene products. The main production units of this project intend to select process technologies that are close to or have reached the current international advanced level.

Construction content: The project construction content includes the main engineering works, storage and transportation engineering, utility engineering, environmental protection engineering, and supporting engineering. The main construction includes 3×75000Nm3/h air separation units (two steam-driven and one electric-driven), a 2.2 million t/a methanol plant (65.7 thousand Nm3/h effective gas (CO+H2) gasification, shift reaction, heat recovery, and purification), a 20 thousand t/a sulfur recovery unit, a 2.2 million t/a methanol-to-olefins unit, an 800 thousand t/a olefin separation unit, a 50 thousand t/a steam cracking unit, a 15 thousand t/a butene-1 from C4 unit, a 450 thousand t/a polypropylene (PP) unit, a 450 thousand t/a polyethylene (PE) unit, and 13 other production units. In addition to the main products of polypropylene and polyethylene, by-products such as sulfur, MTBE, C5, C6, liquefied gas, and wax components are also produced. The storage and transportation engineering includes six circular enclosed coal silos, 36 storage tanks, and eight loading and unloading units, among others. The utility engineering includes two (one operating, one standby) 380 tons/hour high-temperature, high-pressure pulverized coal-fired boilers, among others. The environmental protection engineering includes one waste gas incineration unit and one integrated sewage treatment plant, among others. The supporting engineering includes park water supply engineering, park slag yard, hazardous waste disposal engineering, among others.

To reduce carbon emissions in the olefin project, the project minimizes the CO2 emission intensity generated from shift hydrogen production at the process source, achieving deep integration of green hydrogen with modern coal chemical industry. Relying on regional green power supply derived from green solar energy conversion (referred to as green electricity), the project plans to initially build a base year series of 12 sets of 1000 Nm³/h water electrolysis hydrogen production units. Each subsequent year, an additional series of 12 sets of 1000 Nm³/h water electrolysis hydrogen production units will be added, and by the tenth year, a total of 10 series comprising 120 sets of 1000 Nm³/h water electrolysis hydrogen production units will be completed, gradually supplementing green hydrogen and green oxygen year by year over ten years.

On January 18, 2024, the project's environmental impact report was approved by the Ministry of Ecology and Environment.

On January 26, 2024, the project was approved.

On February 3, 2025, the groundbreaking (resumption) ceremony for major projects in the first quarter of 2025 in the Zhundong Development Zone will be held at the project site.

The project officially commenced on February 23, 2025.

Announcement of the bid winners for the special tender of the air separation technology, process package, and complete equipment project on April 8, 2025.

The EPC project kickoff meeting for the methanol-to-olefins unit was held in August 2025.