Daiichi Chuo Targets U.S. Coal Export Boom as It Adds Bulk Ships

Monday, 06 February 2012

Daiichi Chuo Kisen Kaisha (9132), a Tokyo- based shipping line, said it’s targeting a boom in coal exports from the U.S. as shale gas production frees up the fuel for sales overseas. The shares were poised for their biggest gain since at least 1974.

“Exports of coal from the U.S. could easily double in the next three or four years,” Saburo Koide, president of the company, said in an interview in Tokyo yesterday. “We’ve already had several inquiries on shipping coal from there,” he said, declining to name potential customers.
The shipping line plans to add an office in Brazil as early as next month to handle imports to South America, expanding its overseas branch network that includes China and India, Koide said. The U.S. can boost coal exports as much as 110 million tons by this year as low natural gas prices erode the fuel’s domestic demand, the International Energy Agency said last month.
“We’re going to see more bulk ships traveling to the U.S.,” Koide said. “China and India are already strong markets for coal. Brazil is also expanding.”

Daiichi shares climbed 25 percent, headed for the biggest gain since at least September 1974, to 141 yen as of 1:37 p.m. in Tokyo. The Nikkei 225 Stock Average rose 1.1 percent.
Shale Rock
The development of shale gas reserves in the U.S. is reducing the country’s reliance on coal for power stations, opening the way for the fuel to be exported. The U.S Energy Department forecast coal’s market share for power generation will decline to 43.5 percent this year from 44.9 percent in 2011, according to Simmons & Co. International.

Marcellus shale rock formation, stretching across the U.S. Northeast, has enough reserves to meet the nation’s gas demand for about six years, according to estimates from the Energy Department. Global coal demand may expand 2.8 percent a year to 2016 amid demand from emerging economies, the Paris-based International Energy Agency said last month.
“Demand for coal from developing countries is increasing as their populations and economies expand,” Koide said. Daiichi already has won some contracts to transport coal from the U.S., he said.
Daiichi plans to expand its fleet to 280 ships by the end of March 2016, from 195 vessels in March, according to the company’s mid-term forecast. The shipping line plans to add 111 vessels including capesizes and panamaxes in this period.

In comparison, Mitsui O.S.K. Lines Ltd. (9104), operator of the world’s largest merchant fleet, had 917 ships at the end of March, according to its annual report. The shipping line is the largest shareholder of Daiichi with a 26 percent stake, according to data compiled by Bloomberg.
Daiichi will make a loss of 3.8 billion yen ($49 million) on sales of 148 billion yen in the year ending March 31, the company said in October. It’s scheduled to announce earnings for the third quarter on Jan. 31. Koide declined to comment on the company’s earnings forecast.
Source: Bloomberg

Envidity Inc launches coal gasification project in Mongolia

Sunday, 28 Aug 2011

Retired US Army General Wesley Clark chairman of Envidity Inc announced the commitment of funds to launch a USD 1 billion Mongolian Underground Coal Gasification-Gas to Liquids project. The project will transform low quality deeply embedded, underground coal into high quality fuel, and is a first step towards fuel independence for Mongolia.

In August of last year, Envidity entered into an exclusive agreement with operator Live Energy Group LLC and Shine Shivee LLC, to transform economically stranded coal, that is over 150m deep in the strategic Shine Shivee license areas, into domestic fuel for Mongolia. On July 22 of this year Envidity exercised that option.

Envidity’s project has been recognized and encouraged by Senior Mongolian Government officials as a viable way to tackle the issue of Mongolian fuel self-sufficiency given its potential to produce 1,000 barrels per day of synthetic diesel that will satisfy 10% of local demand within 24 months, and 15,000 barrels per day within 60 months.

The project will provide Mongolia with the largest clean-energy technology transfer in its history, offering a source of clean and reasonably priced fuel and electricity for years to come. The project is expected to create 3,000 construction and 150 permanent higher salaried jobs for the Mongolian people. The project has the potential to establish over 7 commercial plants in the next 15 years and will bring as much as USD 7 billion in investment.

Mr Clark said that “Within two years of launching the Envidity project, domestic production of fuel from Mongolia’s coal reserves will begin. With the Envidity project at full production, the Mongolian people will no longer need to line up at gas stations for a 20 liter quota of high priced foreign supplied fuel. Mongolia will become a fuel exporter in the future.”

Sasol Boosts Dividend 11% as Oil Gain, Cost Control Lift Profit

March 07, 2011, 4:41 AM EST

By Carli Lourens

March 7 (Bloomberg) -- Sasol Ltd., the world’s largest producer of motor fuels made from coal, boosted its first-half dividend 11 percent as oil price gains and cost control lifted profit.

The increase to 3.10 rand (45 U.S. cents) a share also takes into account “the improved market and economic conditions,” Johannesburg-based Sasol said in a statement today. Net profit jumped 21 percent to 7.6 billion rand in the six months through Dec. 31 from 6.3 billion rand a year earlier.

Sasol’s profit is closely tied to oil prices and to the South African currency exchange rate against the dollar. Oil gained 16 percent to $105.96 a barrel in New York so far this year while the rand weakened 3.8 percent to 6.88 on the dollar.

A proposed $8.8 billion coal-to-fuel project in China by Sasol and partner Shenhua Ningxia Coal Industry Group Ltd. was approved by the Chinese environmental ministry, according to a posting on the ministry’s website today. A feasibility study on a gas-to-fuel plant in Uzbekistan should be completed this month and an initial study into a coal-to-fuels plant in India is in its “final stages,” Sasol said today.

Costs will be contained within “inflationary levels” for the full year, the company said. Synthetic fuel output will be “marginally lower” in the full year after falling 7.5 percent in the first half as the South African coal-to-fuels plant underwent its biggest ever planned maintenance outage, it added.

The company uses proprietary Fischer-Tropsch technology to make gasoline, diesel and jet fuel from coal it mines in South Africa and from natural gas from below the ocean floor near Qatar. The company shifted the focus of future investment to gas last year, betting it will be a more profitable raw material than coal.

Tags : Shenhua Ningxia Coal Industry Group, Fischer - Tropsch technology