China plans to invest US$12.8 billion to develop Asia's largest coal-to-chemical production base in Ningxia province in a move to diversify fuel sources, the South China Morning Post reported. The plan is part of the more than US$21.79 billion of investment in chemical projects that also involves Asia's biggest oil producer, PetroChina. Shenhua, the national's largest coal producer, has already begun building its US$1.7 billion plant in Ningxia, capable of turning methanol into 520,000 tons of propylene annually. The company will use technology from German engineering group Lurgi, and is expected to complete the project by the first half of 2010. The government also recently signed a framework agreement with PetroChina on the construction of a refinery and an ethylene plant in Chengdu, capital of Sichuan province and one of the largest cities in the southwest.