Shell bids for coal-to-liquid project in China's west
Fu Chenghao
2005-12-24 Beijing Time
shanghaidaily.com
ROYAL Dutch/Shell Group has handed in a feasibility study report on a coal-to-liquid project in China worth several billion dollars to compete with Sasol Ltd, the National Development and Reform Commission said.
The project involves the proposed building of two plants with a combined investment of US$6 billion to US$8 billion in Shaanxi Province and Ningxia Hui Autonomous Region, which represent areas with the most significant coal reserves in the country.
The estimated crude production capacities of the two plants are up to 80,000 barrels per day, or more than 1 percent of China's total oil consumption currently.
The commission, China's top planning body, set up a working team consisting of Shenhua Coal Liquefaction Corp and Ningxia Coal Group Co at the start of 2004 to look for partners for the project.
In September 2004, the team signed a memorandum of understanding with South Africa-based Sasol to evaluate the feasibility of the project. Shell signed a similar pact with the team in November last year, according to a statement posted on the commission's Website.
Sasol may follow suit by submitting its report as early as next month, according to sources at Ningxia Coal.
The working team will then study in detail the two reports for a one-year period and construction of the plants may start in 2007.
But there is a possibility the two foreign companies may join hands in the project or they may cooperate respectively with the two local partners, said a source close to the project.
Johannesburg-based Sasol, the country's largest fuel maker, produces around 150,000 barrels of crude oil per day from its coal-to-liquid technology.
Shell, however, is better at its gas-to-liquid technology, industry experts say.
China replaced Japan as the world's second-largest oil consumer after the United States in 2004. |
