Shenhua and Sasol Planning Coal Liquefaction Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Shenhua Group Corporation Limited (Shenhua), China's largest coal producer, and South Africa's Sasol Limited (NYSE:SSL), the world's first manufacturer commercializing coal liquefaction technology, are planning coal liquefaction projects in China's Shanxi province and the Ningxia autonomous region. The two companies are currently completing the feasibility assessment of the projects, which usually takes about 18 months.

The projects are anticipated to adopt Sasol's indirect coal liquefaction technology in order to produce 80,000 barrels a day of various kinds of liquid fuel. The two companies will invest equally in the projects and expect to launch their products in 2016.

"China is a crucially important market for Sasol, and a key dynamic to realizing its global interests. As China has the world's third largest coal reserve, our creative technology will help China benefit from making sustainable use of its abundant natural resources," said Sasol CEO Pat Davies, who made the remarks in the company's board meeting held in China.

He also said that the two projects would not only supply clean fuel energy, but also create 15,000 jobs and tremendous wealth for the surrounding area. Davies stated that Sasol is looking forward to completing the feasibility assessment and wishes for long-term cooperation with Chinese partners in order to help develop China's coal liquefaction industry.

Using its own technology, Shenhua has already constructed its first coal liquefaction line which annually produces 1.08 million tons of oil and consumes 3.45 million tons of coal. The company has put the production line into full commission and plans to launch the industrial operation in September this year. The ambitious coal giant plans to possess an annual coal liquefaction capacity of 5 million tons before 2009 and 30 million tons before 2020 by investing $34.8 billion.

Sasol produces 150,000 barrels of oil per day through coal liquefaction in South Africa, supplying 37% of the country's transportation fuel. The company employs 32,000 people around the globe and had a market value of $35 billion in the 2007 fiscal year. Sasol created its Beijing and Shanghai offices in 2005 and 2007, respectively.

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