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Home | News |Sasol to study feasibility of plant in China
Sasol to study feasibility of plant in China
Updated: 2004-08-25 00:00 Source: share:

Cape Town - Oil-from-coal producer Sasol confirmed yesterday that it had signed a letter of intent with Chinese officials to investigate the feasibility of a major new plant in China.

"It's early days yet, and we cannot confirm what it would cost or what the output would be," said a spokesperson.

He was responding to reports from China that a Sino-South Africa team would next month begin studying the feasibility of building two coal liquefaction production bases in northern Shaanxi province and Ningxia autonomous region at a cost of about $6 billion (R40.2 billion).

Coal liquefaction is the conversion of coal into synthetic fuels.
Liquid and solid products from coal can be used for fuelling vehicles and power generators, and yielding materials for chemicals.

"This marks China's strengthened efforts in finding substitute energy and its attempts to counteract price fluctuations in the global crude oil market," Xinhua news agency quoted Zheng Xinli, the deputy director of the policy research office of the Communist Party's central committee, as saying. 

China was interested in coal liquefaction on a large scale as the country's coal reserves of about 1 trillion tons accounted for 70 percent of its total energy reserves, Xinhua said.

The agency said China's increasing dependency on Middle East oil and rising crude prices had "spurred a new sense of urgency in the country to guarantee its energy supplies ... China is reliant on overseas producers for one-third of its demand."

The Sasol spokesperson said the feasibility study would take about a year to complete, but would get under way once a memorandum of understanding between the two parties was finalised.

Sasol closed down R4.31 at R113.49 yesterday. The chemical sector was up 1.06 percent.


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