China to Produce Liquid Fuel from Coal
China’s first coal liquefaction project,
which will go into operation in 2008, will
be able to produce more than 1 million
metric tons (mt) of oil a year, significantly
reducing the country’s dependence on oil
imports. Shenhua Group Corp. Ltd.
launched the coal liquefaction project in
2004 in Erdos, a city in the Inner Mongolia
Autonomous Region. 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 mt of coal into around 1 million
mt of oil products. When the other two
production lines come online in 2009, the
plant will be able to produce 3.2 million
mt of oil products. Statistics from the
National Development and Reform Commission
show that oil consumption increased
9.3% in China in 2006 to top 346
million mt, with net imports growing
19.6% to 163 million mt.