With an investment of 17.04 billion yuan, TBEA Co., Ltd. is intensifying its focus on coal-to-gas projects. On March 31, TBEA announced plans for its subsidiary, Tianchi Energy, to invest in a coal-to-natural gas project with an annual production capacity of 2 billion cubic meters. This announcement comes amid a challenging business environment, as TBEA’s projected net profit for 2024 is expected to drop by 59.81% to 63.55% year-on-year, totaling between 3.9 billion and 4.3 billion yuan.
According to a report, the decline in TBEA’s performance can be attributed to two main factors. Firstly, the price of polysilicon has fallen below production costs, leading to significant losses in this sector. Secondly, the domestic coal sales prices have decreased, negatively affecting profitability in the coal business. In light of these challenges, the coal-to-gas initiative aims to extend TBEA’s coal business supply chain, optimize its industrial structure, and improve overall efficiency. This project also opens new revenue opportunities, enhancing profitability and resilience.
Recent financial reports indicate a downward trend in TBEA’s net profit. In 2023, the company reported revenues of 98.206 billion yuan, a slight increase of 1.76% from the previous year, while net profit fell by 32.75% to 10.703 billion yuan. The first three quarters of 2024 have seen further challenges, with revenues of 72.341 billion yuan, a 1.79% decline, and net profit dropping 54.17% to 4.297 billion yuan.
Yuan Jingmei, a researcher, explained that the losses in the polysilicon segment are a significant contributor to the overall decline. The imbalance in supply and demand within the photovoltaic industry has caused polysilicon prices to stay at low levels since April 2024, exacerbating the financial strain on TBEA. Additionally, the local coal market’s conditions have further pressured profit margins.
On January 17, 2025, TBEA reiterated its expectations for a significant drop in net profits, primarily due to the plummeting prices of polysilicon and coal. The company is likely to recognize a total impairment provision of 2.149 billion yuan as it continues to focus on innovation and cost control for sustainable development.
In response to these financial pressures, TBEA has committed to investing further in coal-to-gas projects. The company’s announcement on March 31, 2025, confirmed an investment of 17.04 billion yuan to establish a coal-to-natural gas facility with an expected output of 20.5428 million Nm³/a. The project is designed to convert 5.7974 million tons of raw coal annually, producing not only natural gas but also byproducts such as coal tar and ammonium sulfate.
Yuan noted that TBEA has access to substantial coal resources in the Xinjiang region, with reserves exceeding 12 billion tons and an annual production capacity of 74 million tons. This aligns with national strategies for coal-to-oil and gas projects, as well as local development plans in Xinjiang, aimed at enhancing energy security and self-sufficiency.
Currently, several coal-to-natural gas projects are operational in China, including those by Datar Energy and Inner Mongolia Huineng, contributing to the industry’s overall profitability. The sector has shown signs of rapid expansion, with new projects starting construction, indicating a growing market presence.
Looking ahead, with increasing governmental support for clean energy initiatives, coal-to-natural gas is expected to become an essential component of the energy landscape, anticipating a production capacity exceeding 10 billion cubic meters annually by 2029.
