China's top coal company Yankuang Group has won initial
governmental approval to build a 10 billion yuan coal-to-oil
project in Shaanxi Province.
Several technical experts sent by the National Development and
Reform Commission (NDRC) have finished assessing the project in
Yulin in the Northwest China province, Zhang Minglin, deputy
general manager of Yankuang, told Bloomberg yesterday.
The NDRC hasn't yet given its final permission to start building
the venture, he said.
The capacity of the project will reach 1 million tons of oil
products a year, a source with Yankuang had told China Daily
earlier.
Yankuang's Hong Kong-listed unit, Yanzhou Coal Mining Co Ltd,
will take a stake in the project, Zhang said, without
elaborating.
Yankuang may spend a further 50 billion yuan to expand the
venture to 5 million tons a year by 2013, according to Zhang.
By 2020, coal-to-oil projects under Yanzhou Coal Mining Co will
have the capacity of 10 million tons per year, said the company's
website.
Coal already meets up to 70 percent of China's energy needs,
mostly for the power and steel sectors. Oil imports have been
increased to fuel China's booming economy, spurring the nation to
look for technologies that can turn some of its coal reserves into
fuel and other chemicals.
China's first direct coal-to-oil plant will start operation this
year, according to China's largest coal producer Shenhua.
The project is based in Erdos in the Inner Mongolia autonomous
region. Its annual output capacity is 1.08 million tons, and will
consume 3.45 million tons of coal.
Shenhua launched the project in 2004. The company has joined
forces with South Africa-based Sasol to set up two indirect
coal-to-oil plants using Sasol's technology.
Experts estimate that by 2020, coupled with an annual capacity
of 20 million tons of bio-oil, China's coal industry would be able
to produce 50 million tons of oil products every year to help
reduce the nation's oil imports.
But the government raised the threshold for coal-to-liquid fuel
projects last year for fear that excessive development of the
fossil fuel would pollute the environment and strain water
supply.
(China Daily January 11, 2008)
