ASIA

Shell and Shenhua to study CTL plant

ROYAL Dutch Shell and Shenhua Ningxia Coal Industry Group have agreed to undertake a three-year feasibility study into building a coal-to-liquid fuel plant in China's western Ningxia province. The plant would cost about $6 billion and would be one of China's largest foreign investments, according to Shell.

Shell and Shenhua to study CTL plant

The two companies said they would study the technical and commercial viability of building the 70,000 barrels per day plant, which would equal 1% of China's daily oil demand.

The joint venture is driven by record oil costs, prompting China to utilise its coal reserves, which are the third largest in the world, Bloomberg reported.

Sasol, the world's biggest producer of motor fuel from coal, recently estimated China has the potential for at least 12 coal-to-liquid plants.

According to Shenhua Ningxia general manager Wang Jian, the plant may start operating by 2012.

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