Celanese to sell ethanol unit and form jv with Chengzhi Co.

US specialty materials company Celanese Corporation has entered into an agreement with Chengzhi Shareholding Co., Ltd., to further the development of acetic acid-based ethanol as a clean energy source in China.

From 2014 to 2017, Celanese operated a 275,000-tonne/year industrial ethanol unit at the Nanjing, China Chemical Industrial Park. This ethanol unit used Celanese’s TCX technology to produce ethanol and historically sourced feedstock from the company’s acetic acid plant co-located at its Nanjing manufacturing facility.

Celanese will now sell its Nanjing ethanol unit to Chengzhi, along with all related assets, including equipment, storage tanks and pipelines as well as all necessary land rights and permits. Additionally, Celanese would contribute its TCX technology, along with all associated patents, know-how and trade secrets, into a newly formed joint venture. Through this joint venture the two companies would collaborate to further strengthen the TCX technology and promote additional opportunities for utilising the TCX ethanol process technology within China.

“We look forward to realising what Chengzhi and Celanese can achieve through this partnership,” said Todd Elliott, Senior Vice-President of Celanese’s Acetyls business. “By combining Celanese’s process technology expertise with Chengzhi’s strong resources in China coupled with its rich experiences in manufacturing and marketing, we believe the joint venture can play a big role in addressing clean energy needs while creating new demand for acetic acid.”

The agreement announced is subject to the parties reaching definitive agreements. The two companies are also committed to working together to implement a smooth transition leading to a restart of the Nanjing ethanol unit as soon as possible, likely in 2019. Financial terms and conditions are not being disclosed at this time.

Chengzhi’s major shareholder is Tsinghua University; additionally, it is a member enterprise of Tsinghua Holdings Co Ltd., a key enterprise in Jiangxi Province, and the industrial platform for industrialising Tsinghua University’s scientific and technological achievements in fields such as clean energy, functional materials, and medical healthcare.