Nation reins in fast growth of coal-to-liquid fuel projects
(Xinhua)
Updated: 2006-07-29 10:49 In 1999, China launched its first coal-to-liquid project in Pingdingshan,
Central China's Henan Province. However, the project, with a 500,000-ton annual
capacity, came to an untimely end, because the type of coal proved unfit for
coal liquefaction.
In 2001, a high-tech research project, the 863 Program, picked up the pace on
coal-to-liquid fuel projects.
Shenhua Group took the lead in the
process. In August 2004, it embarked on an ambitious direct coal liquefaction
project, the first of its kind in the world, in Ordos of North China's Inner
Mongolia Autonomous Region.
The project is designed to have an annual capacity of five million tons.
Estimated to cost 24.5 billion yuan (3 billion U.S. dollars), the project will
be undertaken in two phases. The first phase, designed to produce 3.2 million
tons of oil products, is scheduled for production by 2007. The second phase is
scheduled for production by 2010, with a designed annual production capacity of
2.8 million tons.
Other major coal producers followed suit. In February 2006, a coal
liquefaction project with a designed initial annual capacity of 160,000 tons was
kicked off by the Lu'an Group in Tunliu, Shanxi Province.
Two months later, Yankuang Group initiated a huge two-phase coal liquefaction
project in Yulin of Northwest China's Shaanxi Province that will involve a total
investment of 100 billion yuan. The project is expected to yield 10 million tons
of oil products a year by 2020.
However, in addition to the three projects that have won approval from the
NDRC, many other provinces and regions have blindly planned and built coal
liquefaction projects in recent years. The businesses look forward to
significant economic returns counting the high oil price and the current low
cost of coal, despite of the bearing capacity of local resources and ecosystem.
The result -- a rush plunge into the coal-to-oil project in the country.
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