It is reported that Sasol has brought the curtain down on a proposed USD 5 billion coal to liquids joint venture project in China citing delays in having the 94,000 barrel-per-day endeavour approved by the Chinese authorities.

The group also confirmed that its proposed 80,000 barrels per day Mafutha CTL project was effectively on hold after deciding to decelerate the project in 2010. There were no carbon capture and storage solutions for the project in the short term. In addition the need for CTL was now much lower on the South African government list of priorities in terms of preferred sources of power.

Mr David Constable CEO of Sasol since July said China had been reviewing how much of its coal it wanted to dedicate for certain purposes. This had led to a series of delays, so Sasol decided to divert the capital reserved for other projects. He said that “Given the long delay in permitting we moved the capital, but we remain committed to growth in other projects in China.”

The CTL project had cost USD 120 million in feasibility studies, but the amount had been expensed to Sasol’s income statement in the years in which the costs were incurred.

Miningmx reports that analysts were positive on the news. One said in a morning note that “This is a huge positive for growth as Sasol has an extra USD 5 billion for the North American projects.” Mr Constable said the group had earmarked shale reserves in North America as feedstock for its gas-to-liquids projects which could see fuel output increased 30% in 10 years.

Mr Constable who also demonstrated forecasts that shale gas would comprise 45% of all North American gas supply by 2035 from 14% in 2009 said “We are targeting shale gas as a new major project.”

(Sourced from www.miningreview.com)