November 21, 2008

Shenhua CTL project to start operation in September 2008

China Knowledge reported that China's largest coal enterprise, Shenhua Group construction of its production line of coal liquefaction is well on track and is expected to produce the country's first barrel of oil converted from coal in September 2008

Shenhua started the Inner Mongolia based project last year which is also the world's first production line of its kind. The project will involve more than CNY 10 billion and will be able to produce around 10 million tons of oil annually after completion in 2010.

Mr Xue Ji deputy president of Shenhua's energy company said the project will be profitable. Nearly 4 tonnes of coal can produce one tonnes of oil at the cost of around USD 23, much lower than the international oil price of about USD 100 a barrel.

However, a coal to oil project with a one million tonne annual capacity will need 10 million tonnes of waters; therefore, many courtiers were hesitant to put it into mass production.