Sasol’s China coal-to-liquids plant on hold

No more work to be undertaken before application approved

Friday 04, 2011
By SISEKO NJOBENI

PETROCHEMICALS group Sasol said yesterday it would put on hold new work on a planned coal-to-liquids project in China while it awaited the outcome of the Chinese government’s review of the project application.

Sasol and its partner in the project, Shenua Ningxia Coal Industry Group, submitted a project application last year to the National Development and Reform Commission, a macroeconomic management agency that falls under China’s State Council. The commission lists planning of the layout of key construction projects among its functions.

The application seeks approval from the Chinese government to build the coal-to-liquids plant at the Ningdong energy and chemical base in the northwest autonomous region of Ningxia Hui.

Sasol and Shenua Ningxia Coal Industry Group are 50-50 partners in the mooted 94000 barrels a day plant. The project will use Sasol’s proprietary technology. The companies have completed feasibility studies.

Sasol spokeswoman Jacqui O’Sullivan said yesterday the project would cost $8bn-$10bn. As 50% equity partner, Sasol is liable for half of the costs.

Ms O’Sullivan said Sasol and Shenua Ningxia Coal Industry Group were awaiting the decision of the National Development and Reform Commission.

"The project has reached a key decision point and the partners have decided to delay initiation of any further project activities until the outcome of the decision is known," Ms O’Sullivan said.

The Chinese project is one of several Sasol is pursuing outside SA. According to Sasol, the proposed project would be the largest single-project foreign direct investment in China and its largest coal-to-liquid fuels project yet.

In comments made in Beijing when he was part of President Jacob Zuma ’s delegation to China last year, Sasol CE Pat Davies said Sasol and Shenua Ningxia Coal Industry Group had put together "the best possible commercially proven overall integrated technology package".

Sasol’s decision to halt further work on the project follows last month’s announcement of its decision to can a proposed coal-to-liquids plant in Indonesia.

The project had still been at what was called the "ideas stage" of development.

The canning of the project in Indonesia was regarded as an indication that, for Sasol, new greenfields coal-to-liquid projects will play second fiddle to gas-to-liquids projects.

(sourced:Business Day, news worth knowing)
If you believe an article violates your rights or the rights of others, please contact us.