FRANKFURT, November 27 -- Lurgi has won contracts to supply its technology to two EUR1 billion (RMB10 billion) coal-to-plastics projects in China.

The plants, developed seperately by Datang International Power Generation Co. and Shenhua Ningxia Coal Industry Group (SNCG) will be the first two commercial-scale plants based on Lurgi's methanol-to-propylene (MTP) technology for the production of plastics from coal.

The two EUR1 billion (RMB10 billion) projects will comprise Lurgi’s technologies for raw gas conditioning, methanol synthesis (5,000 tons of methanol per day with the Lurgi MegaMethanol process) and Lurgi's latest MTP technology. Both plant complexes will produce around 500,000 tons (540,000 tonnes) of polypropylene per year from coal. Whereas certain proprietary equipment and major machinery are to be supplied from Europe, the brunt of the material for the plants will be purchased in China.

Each contract is worth in excess of "EUR100 million by far" to Lurgi, according to the company.

“The application in China of Lurgi’s key technology allows, for the first time, the commercial production of plastics directly from coal. This is the breakthrough for the industrial application of our technology. It is of high strategic value mainly for countries like the United States, China or Australia which themselves have vast coal reserves”, said Lurgi’s executive board chairman Klaus Moll at a press conference in Frankfurt.

Rising oil prices, rapidly growing demand for energy and gigantic domestic coal reserves make the use of coal for the production of chemicals and fuels a central strategic necessity for China.

The Datang plant, in Xilingol League, central Inner Mongolia, is due to go on stream in late 2008; SNCG's plant, in Yinchuan, Ningxia Hui Autonomous Region, will follow early in 2009.