Sinopec gets into coal chemicals (2)

The company's move is part of a strategy to diversify its investment portfolio and reduce its heavy dependence on crude oil imports during the nation's 12th Five-Year Plan (2011-2015), analysts said.

Sinopec said earlier that more than 70 percent of its total crude oil for refining purposes is imported.

The ultimate goal for the coal-to-chemical industry is to guarantee the nation's energy security by seeking alternatives to oil, said Zhang Minglin, vice-general manager of Yankuang Group Co Ltd, which was one of the earliest companies to move into the coal-to-chemical industry.

Imports provide more than 50 percent of the country's crude oil. Experts have said that China's reliance on foreign oil will keep rising to support economic expansion.

However, rich resources in coal have made China generally self-sufficient in energy. Coal accounts for about 70 percent of the country's total energy use.

To date, most of the participants in the coal-to-chemical sector have been coal companies, including China Shenhua Group and Yankuang Group.

However, the corporate rush into the industry in recent years has led to overheated investment, which prompted the central government to tighten requirements for such projects.

Du Minghua, head of the energy technology area expert group of the National Hi-Tech R&D Program of China, which is under the Ministry of Science and Technology, said that the industry will be from 2011 to 2015 in a trial period for large-scale commercial use.