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Hainan natural gas is expected to enrich domestic methanol resources
China has emerged as the leading production and consumption hub for global methanol. Currently, methanol market prices remain stable and profitable, with strong demand across various industries. This growing market presents significant opportunities for expansion and investment.
The South China Sea is rich in natural gas reserves, many of which contain high levels of carbon dioxide. This unique characteristic provides a competitive advantage for the development of the methanol industry in Hainan. By leveraging Hainan's strategic location, proximity to key markets, and convenient maritime logistics, large-scale methanol projects can not only deliver substantial economic returns but also support environmental sustainability. Such initiatives align with China’s broader strategy to develop offshore natural gas resources more effectively.
Zhu Huayou, vice president of the China South Sea Research Institute, along with other experts, highlights that the Beibu Gulf region benefits from its close connection to China’s economically vibrant southeastern provinces and its access to the resource-rich southwestern hinterland. The area holds great potential for offshore oil and gas development, supported by numerous deep-water ports and favorable conditions for industrial growth. Focusing on methanol and other oil and gas-based chemical industries is seen as a logical step for the region to fully utilize its geographical and resource advantages. Moreover, this shift could help balance China’s oil and gas chemical industry, which has traditionally been concentrated in northern regions.
Using high-carbon dioxide natural gas for power generation or as civil fuel would result in high resource consumption and significant carbon emissions. However, converting it into methanol allows for zero carbon dioxide emissions during the production process. Most methanol plants require additional carbon dioxide to maintain an optimal hydrogen-to-carbon ratio (2-2.05). In contrast, using high-carbon dioxide natural gas eliminates the need for extra COâ‚‚, improving resource efficiency and reducing energy consumption.
According to Hainan Province’s "Eleventh Five-Year" Development Plan, the goal for the petrochemical industry is to develop natural gas-based chemicals, focusing on ammonia and methanol, while accelerating downstream product development. The plan aims to achieve an annual gas supply of 5 billion cubic meters and produce 3 million tons of chemical products. This will establish Hainan as the largest comprehensive natural gas processing base in the country.
Analysts suggest that Hainan should take full advantage of the opportunities presented by the South China Sea’s resources. Particularly in terms of balancing natural gas supply, the province must seize the moment and increase new gas sources to extend the industrial chain and drive sustainable development.