A groundbreaking experiment is expected to help China cut down on energy consumption and reduce its reliance on oil.

The nation now has plans to industrialize its homegrown coal-to-petrochemicals technology after the success of a project using the world's first 10,000-ton DMTO (dimethyl ether/methanol-to-olefin) industrialization equipment.

DMTO is a technology that uses coal or natural gas as a substitute for crude oil to produce olefin produces, such as ethylene and propylene.

Sources said there is already a lot of interest in the technology from firms both in China and abroad.

The experiment took place in Northwest China's Shannxi Province. The Shannxi provincial government and the Chinese Academy of Sciences (CAS) announced the outcome yesterday.

Yuan Chunqing, acting governor of Shannxi, told a press conference at the Great Hall of the People in Beijing that the technology's industrialization would further rationalize China's energy structure. The country is rich in coal but short of oil and natural gas.

"The success of the DMTO industrialization experiment means we can explore a new way of developing the olefin industry and reduce oil imports, which is significant to our energy safety," Yuan said.

The experiment began in February and received an investment of 86.1 million yuan (US$10.6 million) from the Shannxi Xinxing Coal Chemical Industrial Co Ltd, a government-backed enterprise.

"The success of the experiment lays a solid foundation on which to increase the equipment's annual production ability to the million-ton level," said Li Chunlin, an official with the Shannxi Provincial Commission of Reform and Development.

Li said an industrialization programme processing 3 million tons of methanol per year would be carried out in Yulin in the northern part of the province. Preliminary work was already under way.

"Our DMTO technology has a promising market and dozens of enterprises from home and abroad have contacted its owners to seek technology transfer," Li said.

Editor: Yan