China Daily reported that Shenhua Group Corp Ltd, China biggest coal producer will invest CNY 52 billion in coal-to-oil conversion projects in the Xinjiang Uygur autonomous region aiming to reduce the country's dependence on imported oil.
According to the company plan by the end of 2015 Shenhua will reach 70 million tons of annual coal production and build a coal-to-oil conversion plant with annual production capacity of 3 million tons. Shenhua has 20 million tons of coal production annually in Xinjiang and it will invest CNY 3.2 billion in 2011 in 18 projects in the region.
During the 12th Five-Year Plan (2011-2015) period, Shenhua will invest a total of CNY 109.5 billion in Xinjiang to develop its coal, power, coal-to-oil and railway construction sectors. Among them, the coal-to-liquid fuel sector takes up about half of the investment.
According to its expansion plans, the company will build coal-to-oil conversion plants with a designed production capacity of 10 million tons in Ganquanbao industrial park in Urumqi, the capital of Xinjiang.
The company is waiting for official approval of the project
Mr Wang Ningbo vice-general manager of Shenhua Xinjiang Energy Co Ltd said "Hopefully, we will get the approval by the end of this year and the construction of the first 300 tons of coal-to-oil project will start in May 2012.”
He said that at the beginning of 2011, the company planned to invest CNY 338 million to start water, electricity and office building construction in the coalmine area. However, the coalmine is an auxiliary project for the coal-to-oil conversion project in Urumqi.
He added that "We cannot start coal production in Heishan until we get the approval because it is a key coal supplier for the coal-to-oil projects in Xinjiang."
Shenhua said it is the only operator to obtain approval to develop coal-to-oil projects in China. Its first such project with 1 million tons of coal-to-liquid capacity in Inner Mongolia autonomous region has already made profits.
Mr Zhang Yuzhuo general manager of Shenhua Group said the Inner Mongolia coal-to-oil project produced 216,000 tonnes of oil in the first quarter and profits stood at more than CNY 100 million.
The company said the coal chemical industry including coal-to-oil projects, would expand and become more prosperous in Xinjiang where it is estimated to have 2,190 billion tons of coal accounting for 40% of the country's total reserve. Some experts said coal to oil conversion is unprofitable because of wastage during the production process.
(Sourced from China Daily)
