China's first coal liquefaction project, which will go into
operation in 2008, will be able to produce more than one million
tons of oil a year, significantly reducing the country's dependence
on oil imports.
Shenhua Group Corporation Limited, one of China's largest coal
producers, launched the coal liquefaction project in 2004 in Erdos,
a city in the Inner Mongolia Autonomous Region.
"The project transforms coal into refined oil. When the second
phase is completed in 2010, the plant will produce 6 million tons
of oil products each year and help reduce China's reliance on crude
oil imports," said Wang Pinggang, vice president of Shenhua
Group.
According to Wang, Shenhua will invest 24.5 billion yuan (US$3.2
billion) to build three production lines in the first phase of the
project.
The first line, currently under construction, will enter trial
production at the end of the year and be able to convert 3.45
million tons of coal into around one million tons of oil
products.
When the other two production lines come on stream in 2009, the
plant will be able to produce 3.2 million tons of oil products.
"More than 60 percent of the equipment we are using is
domestically-made and we also own the intellectual property rights
for the manufacturing technology," said Wang.
The coal liquefaction technique has drawn increasing attention
in recent years as international oil prices have shot up.
"The Shenhua project is of great importance to China, the
world's fourth largest economy, both in terms of energy safety and
economic development," said Li Kejian, head of the coal
liquefaction technology research center of the Beijing Research
Institute of Coal Chemistry.
Statistics from the National Development and Reform Commission
show that oil consumption increased 9.3 percent in China in 2006 to
top 346 million tons, with net imports growing 19.6 percent to 163
million tons.
According to the Ministry of Land and Resources, China's coal
reserves are around one trillion tons.
(Xinhua News Agency March 30, 2007)