Coal-to-oil project deal 'close'
By Zhu Shenshen and Pan Xiaoyi |
July 6, 2010, Tuesday
|
Print Edition
Print Edition
CHINA Shenhua Group and a South Africa-based firm are "close" to agreeing on a joint venture for a coal-to-oil project, with a total investment of US$8 billion to US$10 billion, in the Ningxia Hui Autonomous Region, a South African official told Shanghai Daily yesterday.
Shenhua, China's biggest coal producer, will set up the venture with Sasol, a major South African coal firm and a leader in the coal-to-oil technology. Both sides are "close" to signing an agreement after having had several rounds of discussion on the project in northwest China's Ningxia region, according to Rob Davies, the South African minister of trade and information.
"It's a project that is beneficial to both sides (in energy)," Davies said at an opening ceremony to promote South Africa's two-month trade and investment events during the World Expo 2010 Shanghai.
No further details were disclosed. But an earlier Reuters reports said the project may start construction at the end of this year and would be able to produce 93,000 barrels of crude oil equivalent per day.
China, relatively rich in coal but poor in petroleum resources, has been pushing coal-to-oil technology since 2006 as it aims to reduce reliance on oil imports and counter rising prices.
However, the process has been slow to take off as the conversion from coal to oil requires a large quantity of water and harms the environment because it leads to emission of carbon dioxide and other pollutants. Moreover a coal-to-oil project is extremely expensive.
Reuters cited the governor of Ningxia as saying that the central government has not suspended the coal-to-oil project in the region, which is pending official approval, although it has shelved approval for new projects.
Trade between China and South Africa soared 20 times from 1998 to 120 billion rand (US$15.5 billion) last year.
Shenhua, China's biggest coal producer, will set up the venture with Sasol, a major South African coal firm and a leader in the coal-to-oil technology. Both sides are "close" to signing an agreement after having had several rounds of discussion on the project in northwest China's Ningxia region, according to Rob Davies, the South African minister of trade and information.
"It's a project that is beneficial to both sides (in energy)," Davies said at an opening ceremony to promote South Africa's two-month trade and investment events during the World Expo 2010 Shanghai.
No further details were disclosed. But an earlier Reuters reports said the project may start construction at the end of this year and would be able to produce 93,000 barrels of crude oil equivalent per day.
China, relatively rich in coal but poor in petroleum resources, has been pushing coal-to-oil technology since 2006 as it aims to reduce reliance on oil imports and counter rising prices.
However, the process has been slow to take off as the conversion from coal to oil requires a large quantity of water and harms the environment because it leads to emission of carbon dioxide and other pollutants. Moreover a coal-to-oil project is extremely expensive.
Reuters cited the governor of Ningxia as saying that the central government has not suspended the coal-to-oil project in the region, which is pending official approval, although it has shelved approval for new projects.
Trade between China and South Africa soared 20 times from 1998 to 120 billion rand (US$15.5 billion) last year.
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