Sasol and Chinese Sign Landmark Coal-To-Liquids Agreement
Press Release Source: Sasol
Thursday June 22, 6:06 am ET
biz.yahoo.com
JOHANNESBURG, South Africa, June 22 /PRNewswire-FirstCall/ -- Today in Cape Town, South Africa, Sasol (NYSE: SSL; JSE: SOL) signed a co-operation agreement with a consortium led by China's Shenhua Corporation for proceeding with the second stage of feasibility studies to determine the viability of an 80 000 barrels per day (bpd) potential coal-to-liquids (CTL) in the Shaanxi Province, about 650 kilometres west of Beijing.
A similar agreement for another 80 000 bpd CTL project in the Ningxia Hui Autonomous region, about 1 000 kilometres west of Beijing, was signed with Shenhua Ningxia Coal Ltd yesterday.
This signing was followed by a presentation by Sasol on the value proposition of CTL for China to the People's Republic of China's Premier Wen Jiabao. The Premier is on an official visit to South Africa.
"We are highly appreciative of the Chinese Government's keen interest in the projects," says Sasol CE Pat Davies.
The meeting comes as stellar growth in the Chinese economy has caused China to increase its oil imports exponentially. As a result, the drive towards coal for energy security has been endorsed at the highest levels in China and CTL conversion technology, in particular, has been earmarked as having the potential to reduce dependence on the importation of crude oil and refined products. Davies says that coal utilisation technologies have been flagged in the 11th Five Year Plan of the Peoples Republic of China as an area for policy intervention and support.
"This policy makes eminent sense," says Davies. "China has all the energy it needs in the form of coal and Sasol can provide the means of turning this coal into valuable transportation fuel to replace imported crude oil."
Having produced more than 1,5 billion barrels of oil equivalent fuel in South Africa, Sasol is recognised as the world leader in producing fuel from coal, with an unparalleled track record of more than 50 years of proven commercial CTL experience. "Sasol offers China commercially proven and world- class experience in converting abundant coal reserves into valuable synthetic liquid fuels. Our proprietary and proven Fischer-Tropsch technology offers China a compelling and competitive fast-forward to meeting its future energy requirements in an efficient, reliable and sustainable manner," says Davies.
The proposed Chinese projects comprise two plants, each with a nominal capacity of delivering 80 000 barrels a day of liquid fuels. Combined their capacities are roughly equivalent to that of Sasol's existing Secunda facility in South Africa.
The initial pre-feasibility studies confirmed that all key drivers are in place for establishing a viable CTL business in China using Sasol's unique low-temperature Fischer-Tropsch technology. Each plant is expected to cost more than US$5 billion. Should these CTL projects go ahead, they could be brought into operation as early as 2012.
The second stage feasibility studies will go into more detail in determining capital cost, feedstock cost, water supply and market conditions and will also determine most of the major commercial and funding issues.
"We have now established an office in Beijing, comprising a top level project team, to accelerate our progress on these projects," says Andre de Ruyter, president of Sasol's China Ventures, adding that the initiation of feasibility studies would give real impetus to a synthetic fuels industry in China. Sasol intends to be a significant equity investor in these projects, rather than a technology provider only.
The identified locations meet economy of scale production criteria and dovetails with China's over-arching socio-economic, industrialisation and development policies. Besides the drive for energy self-efficiency, these include achieving productivity growth underscored by a balance between economic development, people and the environment. The establishment of the two new plants in the western hinterland is expected to result in thousands of new jobs and spin-off economic development outside of China's existing high-growth regions.
In developing new CTL plants, Sasol's objective is to design carbon capture ready facilities, which can significantly reduce greenhouse gas emissions.
Sasol, based in South Africa, a developing country which has similar energy requirements to China and has developed its own energy solution, recognises and admires the significant and rapid progress China has made in growing its economy by adopting new technologies and in the process improving the quality of life of its people, says Davies. "Sasol seeks to establish a mutually-beneficial relationship that will contribute to China's economic development and energy security. Such relationships signal a new form of cooperation between developing nations," concludes Davies.
As part of its internationalisation programme, Sasol is also investigating CTL opportunities in the USA and India.
Marina Bidoli
Group Communications Manager
Sasol Ltd
Direct telephone +27 (11) 441 3511
Mobile +27 (83) 253 0478
Direct facsimile +27 (11) 522 9858
Email marina.bidoli@sasol.com
Johann van Rheede
Media Manager
Direct telephone +27 (011) 441-3295
Direct facsimile +27 (011) 441-3236
Mobile +27 (0) 82329 0186
Email johann.vanrheede@sasol.com
Sasol is an integrated oil and gas company with substantial chemical interests. Based in South Africa and operating worldwide, Sasol is listed on the NYSE and JSE stock exchanges. We are the leading provider of liquid fuels in South Africa and a major international producer of chemicals. Sasol uses proprietary Fischer-Tropsch technologies for the commercial production of synthetic fuels and chemicals from low-grade coal and natural gas. We manufacture more than 200 fuel and chemical products that are sold worldwide. In South Africa we also operate coal mines to provide feedstock for our synthetic fuels plants. Sasol operates the only inland crude oil refinery in South Africa. The group produces crude oil in offshore Gabon, supplies Mozambican natural gas to end-user customers and petrochemical plants in South Africa, and with partners is developing gas-to-liquids fuel joint ventures in Qatar and Nigeria. Internet address: sasol.com
Disclaimer - Sasol Limited
We may in this document make certain statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable, relating, amongst other things, to volume growth, increases in market share, total shareholder return and cost reductions. These are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "endeavour" and "project" and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. Forward-looking statements involve inherent risks and uncertainties and, if one or more of these risks materialise, or should underlying assumptions prove incorrect, actual results may be very different from those anticipated. The factors that could cause our actual results to differ materially from such forward-looking statements are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on October 26, 2005 and in other filings with the United States Securities and Exchange Commission. Such forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.
Source: Sasol |
