Sasol, Shenhua consider Chinese coal-to-liquids project

June 22, 2006
South Africa's Sasol and a consortium led by China's Shenhua Corp. agreed to proceed with the second stage of feasibility studies regarding an 80,000 b/d coal-to-liquids plant in Shaanxi Province, about 650 km west of Beijing.

By OGJ editors
HOUSTON, June 22 -- South Africa's Sasol and a consortium led by China's Shenhua Corp. agreed to proceed with the second stage of feasibility studies regarding an 80,000 b/d coal-to-liquids (CTL) plant in Shaanxi Province, about 650 km west of Beijing.

Sasol also has signed a similar agreement with Shenhua Ningxia Coal Ltd. to consider a separate 80,000 b/d CTL project in the Ningxia Hui Autonomous region, about 1,000 km west of Beijing.

The signings came while China's Premier Wen Jiabao visited South Africa. Each proposed plant is expected to cost more than $5 billion. If authorized, the CTL plans could be operational as early as 2012.

Initial feasibility studies confirmed CTL plants are viable in China using Sasol's low-temperature Fischer-Tropsch technology. Second-stage feasibility studies will go into detailed planning on capital cost, feedstock cost, water supply, and market conditions.