Korean Kogas to build a dimethyl ether plant in the Far East for $470 million

The Korean Kogas is ready to build a plant producing dimethyl ether at a cost of $470 million in the Far East, the General Director of Kogas Vostok, Chan Son Lee said at Sakhalin Oil and Gas international conference, Interfax reports.

As he said, the project has no financial risks. "We are going to purchase the whole voulme of the products made at this plant, thus Russia won't have to search for any sales markets", the General Director said.

The planned capacity of the plant makes up 300 thousand tons of dimethyl ether per year. This amount can possibly increase. the recoupment period makes up 4 years. A 150 thousand sq. m area near a gas line is needed to supply the plant with gas. The sector must be situated not far from the port, as dimethyl ether will be transported to Korea.

The company assessed, by 2020 Korea will consume 6.5 million tons of dimethyl ether per year, thus this enterprise can provide only 5% of the country's need in this fuel. So, there are reserves for increment of the production volumes, taking in consideration the large-scale markets in Japan, China and India.

As told by the General Director, Kogas has developed the technology of gas synthesis, separation and purification, direct one-stage production of dimethyl ether without obtaining of intermediate products such as methanol. Dimethyl ether forms no combustion gases and is the prototype of pure gas and gasoline, can be used as car and industrial fuel, at power plants as well. An experimental plant has already been launched in Korea.

In May Kogas and the authorities of the Khabarovsk Territory signed a protocol of intentions, in accordance with which the Korean company undertook development of the feasibility study of the Khabarovsk dimethyl ether production plant.

The representatives of South Korean corporation proposed to built the plant in 2010. The representatives of Kogas previously claimed that the corporation sent its proposals concerning dimethyl ether production to the territorial authorities and the proposals concerning gas deliveries under this project to Gazprom And Exxon Neftegas. Then the two variants of the plant were proposed: a 300 thousand tons plant with investments at the rate of $354 million and the plant with capacity of 1 million tons per year at the rate of $700 million.

In April the government of the Khabarovsk Territory offered four grounds to the investors in order to develop gas chemical production at the territory of the region. One of the building grounds is situated near DeKastri where the terminal of Exxon Neftegas is situated, two more – in Komsomolsk region (Nizhnyaya Tambovka settlement and the ground near Selikhino settlement), the fourth one is situated in Lazo region.

Source: http://www.oilru.com/news/338388/

Translated by Alexandra Utyasheva

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