(Yicai) April 1 -- TBEA said the Chinese maker of power transmission equipment plans to invest CNY17 billion (USD2.4 billion) on a large coal-to-natural gas project as part of its broader effort to transition from traditional coal operations to cleaner energy solutions.

The facility will be built next to one of TBEA’s mines at the Eastern Junggar Coalfield in China’s Xinjiang Uygur Autonomous Region, the Changji-based firm said yesterday. It will be able to produce two billion normal cubic meters of natural gas, including 1.2 billion NM3 of synthetic natural gas, 58,300 tons of liquefied natural gas, and other by-products.

The LNG will be mainly supplied to nearby customers, while the synthetic natural gas will be sold through public pipelines to clients in China’s northern and eastern regions, where prices are high and consumption needs are strong, TBEA noted.

China has relatively insufficient proven natural gas reserves, so this project will help reduce the country’s dependence on imports and promote the clean and efficient use of coal, the company added.

The facility is expected to be completed in three years, reach 80 percent of its capacity in four years, and become fully operational in five years. By then, it will be able to transform nearly 5.8 million tons of raw coal into clean energy every year.

Half of the project funds will come from a capital increase and investors, while the rest will be raised from bank loans. According to a feasibility report, the project’s after-tax payback period, including construction, is between nine and 12 years, depending on gas prices.

TBEA also announced that to support the project the firm intends to spend an additional CNY808 million (USD111.2 million) to build raw coal crushing and transportation facilities at one of its mining sites at the Eastern Junggar Coalfield.

TBEA has been proactively turning its business green, with its subsidiary Xinte Energy becoming one of China’s major suppliers of solar silicon. It has mining rights in several open-pit areas in the Eastern Junggar Coalfield, which have a total annual production capacity of 74 million tons.

Revenue from TBEA’s coal business reached CNY18.2 billion in 2023, accounting for about 19 percent of the total, according to the company’s latest annual financial statement.

TBEA’s shares [SHA: 600089] closed up 0.1 percent at CNY12.03 (USD1.66) each in Shanghai today.

Editor: Futura Costaglione