International Energy Companies Aiming for Chinese ‘Black Gold’

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Researched by Industrial Info Resources (Sugar Land, Texas)--China has plenty of coal but is short of oil and faces challenges of oil safety, pollution control and reduction of greenhouse gas. But at the same time, the challenges provide an opportunity for international energy companies that are in possession of core clean-coal technology.

From the perspective of international companies that already have successfully entered the Chinese coal market, coal lives up to its nickname: Black Gold. Big names like Shell, Sasol (South Africa), GE, ABB and Siemens have been significantly involved in the development of China’s coal industry and green coal-power market.

In the next a few years, many coal chemical projects worth $5 billion to $6 billion will spring up in China’s western coal rich western provinces like Ningxia, Shaanxi and Shanxi. These projects will become the region’s largest foreign-invested projects and will also rank among world’s top coal-chemical enterprises.

Sasol, with its indirect coal-liquefaction technology, is working with China’s largest coal enterprise, Shenhua, to build two indirect coal-liquefaction factories in Ningxia and Shaanxi Province. The factories’ annual production capacity will be 3 million tons of oil, equaling daily substitution of 80,000 barrels of petroleum. The plan for these two coal-to-oil factories is now in the stage of feasibility study.

One of the world’s top industrial gas manufacturers, Air Liquide, is also working with Shenhua to build the world’s first coal-based polypropylene project. The total investment into this project is $2.27 billion. Siemens Power also signed a coal-to-alcohol-ether cooperation agreement with Shenhua’s Ningxia Company in February.

Foreign investment also abounds in the newly started coal bed gas development in China. Chevron and six other U.S. companies are working with China Zhonglian Coal Bed Gas Company on 15 large coal bed gas projects.

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