China BlueChemical Limited, a wholly owned subsidiary of China National Offshore Oil Corporation (CNOOC), announced on Friday that its joint venture methanol plant in South China had carried out a successful trial run.

The methanol plant is owned by CNOOC Kingboard Chemical Limited, a joint venture between China BlueChem and a subsidiary of Kingboard Chemical Holding Limited. China BlueChem has a 60 percent share in the joint venture and Kingboard Chemical 40 percent.

With an annual capacity of 600,000 tons, the methanol plant will be one of the largest facilities of its kind in China.

Expected to go into mass production next year, the new methanol plant will raise China BlueChem's annual methanol production capacity to 800,000 tons.

A total of 1.5 billion yuan (187.5 million US dollars) has been invested in the plant located in Dongfang city in South China's Hainan Province.

CNOOC Kingboard Chemical Limited has signed a 20-year natural gas supply contract with China National Offshore Oil Company Limited (CNOOC Ltd.) to ensure a steady, long-term supply of natural gas for the facility, which uses natural gas as a raw material.

Methanol is an important chemical in its own right, a component of other chemical products and also a clean fuel. It can be used as a petrol substitute or mixed with petrol to make cleaner automobile fuel.

Yang Yexin, CEO and President of China BlueChem said that the methanol plant is part of the company's strategy to diversify its products.

The methanol will be sold to southeast coastal China and Southeast Asia markets, said Yang.

China BlueChem is planning to launch an IPO in Hong Kong at the end of this month.

China BlueChem is the only CNOOC subsidiary engaged in the production of downstream mineral fertilizers and synthetic chemical products.

China BlueChem's production facilities in Hainan and in north China's Inner Mongolian Autonomous Region currently produce 1.84 million tons of urea and 200,000 tons of methanol each year.

Source: Xinhua