A newly-emerging chemical city in Hainan: CNOOC 600 000 t/a methanol project started construction.

The 600 000 t/a methanol project of CNOOC started construction in Dongfang, Hainan Province. This project and other three large projects that have been put on stream such as the Dongfang 1-1 Gas Field made Dongfang into a new chemical city in Hainan.

This methanol project, as the biggest one of its kind in China, was jointly launched by CNOOC Co., Ltd. (holding 60% stakes) and Hong Kong Kingboard (holding 40% stakes) with a total investment of RMB1.47 billion. Dongfang 1-1 Gas Field will provide around 890 million [m.sup.3]/a of natural gas for this methanol project. According to the plan, this project will go into operation in July 2006 with an expected sales value of RMB 900 million.

The three large projects that have been put on stream are:

Dongfang 1-1 Gas Field started construction in January 2002 and went into operation on August 1, 2003 (CCR No. 23, 2003), one and half month ahead of the original schedule. The field lies in North Bay of South China Sea, with a proven gas reserves of 99.68 billion [m.sup.3] as the first offshore gas field developed by China itself as well as one of key projects of China's Tenth Five-year Plan with an investment of RMB3.27 billion. It can produce 2.4 billion [m.sup.3] of natural gas a year, among which 890 million [m.sup.3] supplies for the methanol project, 700 million [m.sup.3] for Yangpu Power Plant and other for the industrial and civil use of Haikou.

CNOOC Fudao second-phase chemical fertilizer project started construction in January, 2002 and put on stream at the end of September 2003 (CCR No.15, 2003), two months ahead of the original schedule. As the first downstream project in CNOOC's up and down stream integrative strategy, it took 8 years from the investigation to operation. The project has a production capacity of 800 000 t/a macro granular urea and 450 000 t/ a ammonia. It is the biggest urea production unit in China with a total investment of RMB2.68 billion.

The Dongfang--Yangpu-Haikou natural gas pipeline project started construction on December 16, 2002 and went into operation on August 11, 2003 (see CCR No. 24, 2003), one and half month ahead of the original schedule. With an investment of RMB480 million and as CNOOC's first onshore long natural gas pipeline, the matching project to the Dongfang 1-1 Gas Field as well as the west loop line of Hainan's island-circling natural gas pipeline net, the pipeline has started to transport the natural gas to Fudao second-phase chemical fertilizer project, Yangpu Power Plant and the Haikou. Connecting with the existing pipeline from Sanya to Dongfang, this pipeline, 360 kilometers long, will run through 10 cities and Yangpu Development Zone ranging from Sanya to west Haikou City.

According to the general manager of CNOOC, Mr. Fu Chengyu, at the ceremony held for the construction starting of the 600 000 t/a methanol project, with the completion of these projects, the chemical industry of Dongfang will enter a large commercial production phase, with an expected macro granular urea production capacity of 1.5 million t/a as the biggest one of its kind in China. Taking the Fudao first phase and other projects into consideration, CNOOC's direct investment in Hainan Province has reached almost RMB 10 billion. In addition, in order to promote the exploitation and development of the oil and gas resources in South China Sea, CNOOC has further planned to establish a series of chemical projects in Dongfang Chemical City, which, by 2007, will have an expected sales income of RMB 4 billion and profit of RMB700 million as a first class comprehensive energy supplier with strong competitive both at home and abroad.