Japan's Ube Industries and HighChem will provide China's Qianxixian Qianxi Coal Chemical Investment Company with the technology for the production of monoethylene glycol from coal, a company source at Ube said Tuesday.
Qianxixian plans to build a 300,000 mt/year MEG plant in Guizhou province, slated for startup end 2012 or early 2013.
The MEG plant will be built together with an upstream 720,000 mt/year dimethyl oxalate plant, which will produce DMO from carbon monoxide and hydrogen derived from coal. All the DMO output will be used for the production of MEG at the downstream plant.
Ube said that MEG demand was rising by 10-15% per year on the back of firm demand for polyester fiber and PET resin.
Ube and HighChem expects more technology license agreements in China for "several millions of tons" and to receive around Yen 5 billion ($60 million) in royalty payments within the next two to three years, the source said.
