Sasol, the top energy firm in South Africa, is entering a crucial phase in planning for its two giant coal-to-liquid (CTL) projects in China.

 

"Now we are in the second stage of feasibility studies for our two CTL projects," said Chen Liming, executive vice-president of Sasol China.

 

The current study will determine details in capital costs, feedstock costs, water supplies and market conditions and will outline most of the major commercial and funding issues, said Chen.

 

Sasol began planning with Shenhua Group Co Ltd and Shenhua Ningxia Coal Ltd for the two CTL projects in 2004. It finished preliminary studies at the end of 2005.

 

The studies confirmed that key elements are in place for establishing a viable CTL business in China using Sasol's low-temperature Fischer-Tropsch technology, said Chen.

 

Sasol's two projects one in Yulin, Northwest China's Shaanxi Province and another in the Ningxia Hui Autonomous Region are designed to produce 80,000 barrels of liquid fuels per day and represent the company's largest investment outside of South Africa.

 

Each plant is expected to cost US$5 billion to US$6 billion. Should these CTL projects be brought to fruitition, they would begin operation about 2013.

 

"Recognized as a world leader in producing fuel from coal, with a track record of more than 50 years of proven commercial CTL experience, Sasol offers China commercially proven and world-class experience in converting coal reserves into synthetic liquid fuels," said Chen.

 

The company has established an office in Beijing, including a project team, to accelerate progress on the projects, he said.

 

The coal to chemical industry will be a growing sector in China, according a medium- and long-term plan for the development of industry, with the nation expected to invest more than 1 trillion yuan in the field by 2020.

 

The nation will focus on the production of liquefied coal, dimethyl ether (DME), coal-to-olefin (CTO) and coal methanol, said the plan.

 

More and more foreign companies have entered China's coal chemical industry, including US chemical giant Dow Chemical, world energy giant Royal Dutch Shell and Thailand's Chia Tai Group.

 

Chen said the quick development of China's coal chemical industry is beneficial for Sasol. "China has abundant coal reserves. The proprietary and proven Fischer-Tropsch technology offers China a compelling and competitive way to meet its future energy requirements in an efficient, reliable and sustainable manner."

 

"Sasol's effort is facilitating China on its road to energy safety and diversification. Meanwhile, Sasol's endeavor is a proof of China-Africa's two-way cooperation," he said.

 

"Establishment of the two plants in the western hinterland will result in thousands of new jobs and spin off economic development outside of China's existing high-growth regions," he added.

 

(China Daily January 30, 2007)