The South African company signed two agreements in June with China’s largest coal producer, Shen Hua Group, to go ahead with feasibility studies into establishing two CTL plants.
The projects, one in northeast Shaanxi province and the other in the northwest Ningxia Hui autonomous region, will reportedly produce 80,000bbl a day.
According to Chinese news agency, Xinhua, Sasol will hold a 50% stake in each project. The total investment in the two projects will be $US10-14 billion ($A12.9-18.1 billion).
During nine months to September 2006, China imported about 803MMbbl of oil and at that rate could import 1.07 billion barrels of crude oil for the year, South Africa’s online newsletter Business Report said.
China is the second-largest consumer of oil after the United States.
But Sasol chief executive Pat Davies said demand for “coal utilisation” is growing around the world, including Australia.
“We foresee a rebirth in coal utilisation in some of the world’s coal-rich regions,” he said in the company’s 2006 annual report.
“This case is particularly strong in those countries that have insufficient or no oil reserves, such as Australia, India, China and the US, as well as South Africa.
“A large percentage of the world’s coal reserves are found in three of the larger, higher-growth economies: India, China and the US.”
The company said all three countries are in talks with Sasol about developing CTL plants to lessen their dependence on oil imports.
Sasol is also involved in gas-to-liquids projects in Qatar and Nigeria and is conducting a feasibility study into GTL opportunities in Australia.
In September, SasolChevron’s Australian representative Tony Pytte said Australia should develop a combination of liquefied natural gas and GTL because it has “all the right drivers”, including “strong government support, a good fiscal regime and vast gas reserves.”
GTL diesel offers lower greenhouse gas emissions than petrol without the high sulphur and particulate emissions of conventional diesel. It is also compatible with existing diesel engines and distribution systems.