Sinopec Engineering Entered Into RMB18.67 Billion Contract Providing One-Stop EPC Services To Zhong Tian He Chuang's New Coal Chemical Project

SINOPEC Engineering (Group) Co., Ltd. ("SEG" or "the Company", together with its subsidiaries known as the "Group") announced that the Company and Zhong Tian He Chuang Energy Corporation Limited recently entered into an EPC contract for the development of a new coal chemical project (the "Project") in Uxin Banner, Ordos, Inner Mongolia. The Company's scope of the work under the contract includes the general contracting of engineering, procurement, construction ("EPC") for main units, such as a coal gasification unit, a purification unit, a 3.6 million tons per annum ("Mtpa") synthetic methanol unit, two 1.8 Mtpa methanol to olefin units (SMTO), a 200 kilo tons per annum ("Ktpa") olefin catalytic cracking unit, a 350 Ktpa polypropylene unit (loop reactor), a 350 Ktpa polypropylene unit (gas reactor), a 120 Ktpa low-density polyethylene unit (tank reactor), a 250 Ktpa low-density polyethylene unit (tubular reactor), a 300 Ktpa linear low-density polyethylene unit (gas reactor), a 10 Ktpa MTBE and 30 Ktpa 1-butylene combined unit, and for utilities and facilities, such as the air separation and air compression units, olefin intermediate tankage units. The contract took effect from the date of signing and the provisional handover date shall be by 30 October 2015. The total value of the contract is approximately RMB18.67 billion.

This is by far the world's largest coal to olefin project. Equipped with the SMTO technology jointly developed by SEG and China Petroleum & Chemical Corporation, it has the capacity up to an aggregate of 3.6 Mtpa methanol to olefin units. It is a significant milestone for SEG to establish an integrated new coal chemical industrial chain.

For the first time, SEG's subsidiaries will take part in this project through the joint EPC contracting model. To create synergies, a project management consortium as well as integrated production and logistics facilities will be set up. This model will significantly reduce construction and management costs, optimize resources allocation, thereby maximizing the Group's profit.

Currently, SEG possesses various key technologies such as Coal to synthesis gas, Synthesis gas purification and transformation, Coal to natural gas (SNG), Synthesis gas to methanol, Methanol to olefin (DMTO/SMTO), and Direct/Indirect coal liquefaction. Through effective coordination and optimization, the Group has established an integrated technical chain in new coal chemical industry. Combined with its existing service advantages in oil refining and petrochemical industries, the Group can also provide one-stop solutions for new coal chemical project owners and thus reinforce its leading position in the new coal chemical engineering market.