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Gold/Mining/Energy : Gasification Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (312)	3/7/2006 7:03:59 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 1740

Coal can slake China's oil thirst, says Sasol Allan Seccombe Posted: Mon, 06 Mar 2006 miningmx.com [miningmx.com] -- SASOL, the world’s leading maker of liquid fuel from coal and gas reckons China's thirst for oil could be quenched through its coal resources. It expects the oil price to range from $55 to $58 a barrel up to June. Sasol makes up to 160,000 barrels of synthetic fuel a day, providing for 28% of South Africa's requirements. It is building two gas-to-liquid (GTL) plants, one in Qatar and one in Nigeria. In China, it is holding talks to advance feasibility studies in China for a coal-to-liquid plant and it is evaluating similar projects in the United States and India. The world's largest coal deposits are found in these three countries. The increased interest shown around the world in the coal-to-liquid technology could result in massive off take of coal. Sasol uses 45 million tonnes of coal a year and 200 million cubic feet of gas per day to make 160,000 barrels a day of fuel. Sasol could build two plants in China that would each use up to 19 million tonnes of coal a year to make 80,000 barrels per day of fuel, made up of two thirds diesel and 34% naptha and liquid petroleum gas. Their combined output of 160,000 barrels per day would equal that of Sasol's South African production. The projects would cost up to a total $14bn and Sasol would hope to hold up to a 50% equity position in each. If 10% of China’s coal reserves were converted to oil it would equal the world’s proven crude oil reserves, said Pat Davies, Sasol's CEO. “China has all the oil it needs in the form of coal,” he said. China has all the oil it needs in the form of coal Sasol has already produced 1.5 billion barrels of oil in the past decade. “That places us in a wonderfully sweet spot to supply energy,” Davies said. Sasol has benefited immensely from the high oil prices, with its interim operating profit up 71%. US light crude for April delivery was trading at $63.48 per barrel by late afternoon South African time, while Brent crude for the same month was trading at $63.71. The price of US crude has jumped about seven percent since mid-February because of worries about growing tensions in key suppliers like Iran and Nigeria. “We still think oil prices will come off… We believe that in this half we are in now prices will be $55 to $58 a barrel,” he said. “We don’t see any major shift that will push the price down. It’s a very complicated story of supply and demand. Iran is playing a factor as are the upsets in Nigeria,” Davies told Miningmx. “These factors tend to come and go. As some of these geo-political events stabilise a bit the oil price will nudge down.” Sasol will unveil a second black empowerment deal on its coalmines in coming months, Davies said. This is separate from the announcement in May 2004 when Sasol and Eyesizwe, the largest empowered coal miner, signed a memorandum of understanding, covering areas of possible cooperation. “We are close to announcing a deal with Eyesizwe and there will be another empowerment announcement before year end,” Davies said, declining to give any more details apart from saying details of the Eyesizwe deal could be released in the next couple of weeks. Sasol mines 51 million tonnes of coal a year, making it the country’s second largest producer. It exports 3.6 million tonnes of steam coal a year. Sasol expects export steam coal prices to rise from the $50 level seen currently. “The prices are $49 to $50 a tonne and we expect them to go up somewhat,” said Jannie van der Westhuizen, the Sasol group general manager. “There was a very cold winter in Europe and the impression we get is that the coal users there have left it a bit late to add to their stock levels. We think they’ll have to build their stocks,” he said. “The Russians are the wild card. If prices go lower than $50 they tend to withdraw. I don’t think it will go much higher than $50, but there is a slight upward trend now and we think it could extend into the next couple of months,” he said. Free news alerts: click here to subscribe The impact on coal prices from increased conversion of oil to fuel is likely to be minimal, van der Westhuizen said, explaining mines would be built specifically for conversion plants, which would use a different quality coal to export-quality coal. The world has 190 years of coal supply based on current usage rates compared to 60 years of gas and 40 years of oil supply, according to the World Coal Institute. Sasol has some concerns that its coal-to-liquids technology could be copied in China. “We are concerned about it, however, the largest challenge is to make the technology work and deliver value. Sasol has that ability to do that with parties in China,” van der Westhuizen said.

To: Dennis Roth who wrote (312)	4/25/2006 6:41:17 AM
From: Dennis Roth	Read Replies (3) \| Respond to of 1740

Coal-to-oil Project Approved 2006-04-25 14:08:13 China Daily en.chinabroadcast.cn@81237.htm Yanzhou Coal Mining, the mainland's second-largest listed coal miner, said its parent company Yankuang Group has received approval from the government to develop a 5-million-ton coal-to-oil project. The first phase of the project in Northwest China's Shaanxi Province is estimated to cost 10 billion yuan (US$1.25 billion). Its capacity will reach 1 million tons of oil products a year, Chief Financial Officer Wu Yuxiang told reporters in Hong Kong yesterday. "Total production capacity of the project will amount to 5 million tons annually," he said, without giving a timetable. Yankung Group will mainly participate in the preliminary stage of the project, which "will be handed over to Yanzhou Coal when the time is ripe," said Wu. "Given the abundant reserves of coal and inadequacy of oil and natural gas on the mainland, the conversion of coal to oil products will be a trend in the future," said Wu. Other mainland coal mines are also becoming active in transforming coal into oil products to cope with rising oil demand. Shenhua Group, the largest coal company on the mainland, is a pioneer of coal-to-oil technology and has poured 300 million (US$37 million) into the research and development of its liquefaction technology since 1997. It will start production of its first coal-to-liquid project at the end of next year. Yanzhou Coal said yesterday it planned to produce 6 per cent more commercial coal this year. It had produced 13 per cent less, or 31.94 million tons of commercial coal - suitable for sale - in 2005, partly because of delays in relocating people in six villages living above its mines. "That dragged down our output by 34.6 million tons," said Wu. But "the impact from the disruptions has been eliminated entirely in April," Wu Yuxiang told reporters. "From now on, all of our coal mines will run at full rates to meet demand. Yanzhou, which has been acquiring assets at home and abroad, would continue to do so, Wu said. The company expects to sign an agreement in the second quarter of this year to buy a coal mine in Shaanxi Province. The project, designed to produce 8 million tons of coal a year, would start production by the end of this year, Wu said. Capacity would be raised to 20 million tons annually over the next three to five years, he added.