Dahua Group and Linde Greater China (LGC) will invest CNY1.1bn ($172.62m) to set up a joint venture to operate and manage the gasification facilities in Songmu Island, Dalian, China.

The JV will be set up pursuant to a letter of intent (LOI) signed between the two companies.

Dahua Group general manager Yu Hong said over the past decades, Dahua and Linde built up a very reliable relationship and keep growing hand in hand as strategic partners.

"The newly signed LOI is another exciting milestone for both of us and we look forward to having new breakthroughs in gasification field in the near future," Hong added.

The production site is expected to achieve a higher operational efficiency and stability of gas product supply by leveraging technologies and solutions of LGC, which is part of The Linde Group.

The Linde Group executive board member Dr Aldo Belloni said this is the first coal gasification project for the company in China.

"Coal gasification provides significant economic and environmental benefits which can help meet the growing demand for clean energy nowadays," Belloni added.