(EnergyAsia, April 14 2011, Thursday) — A migration from conventional ethylene-based monoethylene glycol (MEG) production to coal-based production could potentially lead to a big shake-up of the global MEG market, with China spearheading the way, said US-based intelligent grid software and clean energy solutions provider Nexant Inc.

The coal-to-MEG production process represents a major breakthrough that will impact the chemical industry in coming years, said the San Francisco, California-headquartered company which has produced a study analysing the strategic impact of coal-based MEG and the underlying technology development.

Nexant said that biomass and natural gas can be used as alternative feedstock to coal in sourcing key intermediate synthesis gas (syngas), noting this new route to MEG has opened up an even wider feedstock slate than the headline coal being commercialised in China.

MEG is used mostly to produce polyethylene terephthalate (PET) fibre, the most popular and versatile synthetic fibre whose growth rate outpaces all others. Commonly known as polyester, PET fibre has wide-ranging use as filament yarns (for clothing, furnishings, and technical textiles), as staple fibres (for bed sheets, bedspreads, curtains and draperies), in bottles (for water), film, antifreeze and other industrial applications.

Nexant said polyester plays a significant role in the booming Chinese economy, with the country’s MEG requirements representing 43% of the 18 million tons per year of global demand in 2009. However, China’s current MEG production accounts for just 12% of global supply, but that will soon rise with China’s up-coming coal-to-MEG programme.

Traditionally, MEG has been produced from ethylene via the steam cracking of naphtha or natural gas liquids.

However, limited oil and gas reserves mean that China needs to develop industries based on its vast coal deposits to fuel growth and new technologies are being developed to exploit this coal base.

The new processes will enable China to cost-effectively convert coal, and even biomass and natural gas to MEG via an intermediate of dimethyl oxalate (DMO).

Coal is already used extensively for methanol, ammonia and vinyl chloride (VCM) production in China as well as for olefins production. The recent and exciting development in MEG production technology adds a further derivative to the slate of petrochemical products commercially available from coal feedstock.

While China has only started up one commercialised coal-to-MEG plant in 2010 with a 200,000-ton-per-year capacity, Nexant noted that Beijing plans to accelerate the new technology’s commercial adoption. By end-2011, China is expected to start up four projects each of the same capacity, while another 1.8 million tons per year of capacity could be ready by end-2015. By 2025, China could have over 12 million tons of MEG capacity per year.

China is the world’s largest global importer of MEG, taking in almost six million tons in 2009, including over two million tons from Saudi Arabia.