BASF and Sichuan Lutianhua Co., Ltd. (Lutianhua) signed a Memorandum of Understanding (MoU) to co-develop a pilot production plant that will significantly reduce carbon emissions and increase energy efficiency in producing dimethyl ether (DME) from syngas compared to the traditional process.

DME is a methanol equivalent and can be used as an intermediate to produce lower olefins like ethylene and propylene. Currently, DME is produced via methanol as an intermediate from syngas.

According to the MoU, Lutianhua will invest and build the plant with a step-change technology that is developed by BASF and Linde. BASF will supply new, high-performance catalyst systems that enable one-step conversion of syngas to DME while Linde will provide its newly developed process design and engineering for direct DME synthesis.

The pilot plant is planned to be built in 2020. The cooperation has been facilitated by the newly established Open Innovation Platform of China Petroleum and Chemical Industry Federation (CPCIF).

As a major chemical producer in China, Lutianhua is one of the first companies to adopt advanced technologies and techniques to produce synthetic ammonia and urea with natural gas as a raw material.

The step-change process is enabled by the new, high-performance catalyst systems developed by BASF researchers. Linde’s novel process design is providing significant energy and CO₂ emission reductions. BASF and Linde jointly developed the new direct DME synthesis technology over the past few years.

The predecessor of Sichuan Lutianhua Co., Ltd. was Sichuan Luzhou Natural Gas Chemical Plant, founded in 1959, which is the first enterprise in China who adopted Western technology to produce ammonia and urea with natural gas as raw material. Solely sponsored by Lutianhua Group Incorporated with its ammonia and urea production assets as invested capital, Sichuan Lutianhua Co. Ltd. was established in 1999 under approval of Sichuan Provincial Government and was listed in Shenzhen Stock Exchange in 1999.

Sichuan Lutianhua Co., Ltd. holds controlling interest of Jiuhe Company Limited, Ningxia Hening Chemical Co., Ltd. and Sichuan Lutianhua Green Energy Methanol Corporation. It owns a state level technical center, a Post-Doctoral Research Center and a Class B chemical engineering design institute. It has a production capacity of 1,000,000 MTPA of ammonia, 1,580,000 MTPA of urea, 750,000 MTPA of methanol, 110,000 MTPA of DME, 50,000 MTPA of oleochemical products, 100,000 MTPA of concentrated nitric acid, 180,000 MTPA of dilute nitric acid, 230,000 MTPA of ammonium nitrate and nitro-compound fertilizer, and 100,000 MTPA of Diesel exhaust fluid (DEF).