China's Spending on Coal Gasification to Reach More than $38.7 Billion Over Next Three Years

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Researched by Industrial Info Resources China (Beijing, China)--To date, China has more than 20 coal gasification projects that have received preliminary approval to kick off pre-stage preparations. China's spending on coal gasification is expected to reach more than $38.7 billion over the next three years, according to a recent statement from China National Coal Association.

China lacks a consistent natural gas supply, but is using its rich coal resources to develop the fuel. A related study shows that coal gasification is competitive in price when compared with imported natural gas and liquefied natural gas (LNG), when the price of crude oil is at $80 per barrel.

Following the rapid growth of the coal chemical industry and in the consumption of natural gas, China's coal gasification has grown rapidly, especially in the Xinjiang autonomous region. Statistics show that 10 of the 16 coal gasification demonstrative projects added since 2010 are in Xinjiang. The total designed production capacity of these projects surpassed 4 million cubic meters per year, and the total investment surpassed $48.4 billion.

Coal gasification projects in Xinjiang reportedly have obtained strong financial support from the China Development Bank (CDB) (Beijing). CDB's Xinjiang Branch will focus on four or five key coal gasification projects in Zhundong and the Yili National Comprehensive Demonstrative Zone, and the total financial support for these projects will surpass $8 billion over the next three years. Through coal deep processing, Xinjiang is expected to turn its coal resources into clean energy (natural gas) in the future.

Due to pressure from environmental groups, as well as the impact of energy structural adjustments, top Chinese officials have encouraged coal gasification projects in recent years. In a September 2013 meeting organized by the National Energy Administration (NEA) for state-owned enterprises, officials clarified that the industry policy for the development of new types of coal chemicals will never be changed. Coal gasification and coal liquefaction projects will be performed in an orderly way. As an alternative to coal, coal gasification could effectively ease the environmental burden, and strongly promote local economic development.

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