It is reported that a total of 30 coal liquefaction projects are under
detailed planning or at the stage of feasibility study in the country. According
to conservative estimates, the total capacity would exceed 16 million tons, and
the involved investment would surpass 120 billion yuan (15 billion dollars).
Insiders predict that China's annual oil output liquefied from coal will reach
50 million tons by 2020.
-- Enthusiastic foreign investors --
In addition to domestic coal giants, foreign businesses with coal-to-oil
know-how are also attracted by the promising business opportunities.
Shell Gas and Power Developments BV and the Shenhua Ningxia Coal Industry Co.
(Shenhua-Ningmei) signed an agreement on joint study of coal liquefaction
technology on July 11 this year in Yinchuan, capital of Northwest China's
Ningxia Hui Autonomous Region.
Under the accord, the Anglo-Dutch company will work together with
Shenhua-Ningmei on the technological and commercial feasibility of launching an
indirect coal liquefaction facility with a daily production capacity of 70,000
barrels of oil products and chemicals at the Ningdong coal production base.
"If the three-year feasibility program goes smoothly, the new coal-to-liquid
fuel plant, with an investment of five to six billion U.S. dollars, will be one
of the largest foreign-invested projects in the country," said Zhang Wenjiang,
chairman of Shenhua-Ningmei.
As a leader in clean coal technology, "We have proven technology that
converts coal to gas and then gas to liquids. We believe this technology is
important to China, particularly in large coal-producing areas such as Ningxia,"
said Lim Haw Kuang, executive chairman of Shell China operations.
"Ningxia is not only rich in coal but in water and power supply, which are
all important for the successful development of an indirect coal liquefaction
project," said Zhang Wenjiang.
Aside from Shell, many other enthusiastic foreign businesses have come to
China seeking opportunities with coal-to-liquid fuel projects.
In June 2006, South Africa-based Sasol, the world leader in producing fuel
from coal, joined hands with Shenhua Group to set up two coal-to-liquids plants
using Sasol's unique Fischer-Tropsch technology in Northwest China.
The two firms signed two agreements. One was to proceed on feasibility
studies of an 80,000 barrel a day potential coal-to-liquid project in Shaanxi
Province. The other similar is an 80,000 barrel a day coal-to-liquid project in
the Ningxia Hui Autonomous Region.
"Each plant is expected to cost more than 5 billion U.S. dollars. They could
be brought into operation in 2012 if these coal-to-liquid projects go ahead,"
said Sasol Chief Executive Davies.
(For more biz stories, please visit Industry Updates)
