Sasol, the world's leading producer of coal-to-liquids (CTL), has said it will soon completed a feasibility study on establishing two CTL plants in China which seeks diversified oil supply to fuel its economic growth.

The study between Sasol and two Chinese coal companies, Shenhua Group and the Ningxia Coal Group Co. Ltd., looks to the possibility of setting up two plants each with a capacity of 80,000 barrels per day (bpd), an official with the Johannesburg-based company said on Monday.

"We expected to complete the study by the end of 2005," Sasol's spokesman Johan Van Rheede told Xinhua. He said the two plants could be established in the coal-rich provinces of Shaanxi and Ningxia in west China.

China and South Africa agreed to conduct the feasibility study on the CTL projects when Chinese Vice President Zeng Qinghong visited South Africa in June last year.

The study was launched in September last year after Sasol signed a memorandum of understanding with the two Chinese companies, Van Rheede said.

Some media reports indicated earlier that total investment of the two CTL plants could be as high as six billion US dollars. But Van Rheede said how the cooperation, including the amount of investment and patent issues, will continue could not be decided until the study is finished.

CTL became a hot topic in China's energy industry recently, particularly along with oil price hike globally and growing concern at home over energy security as China's economy continues to boom.

Pat Davies, chief executive of Sasol, said the high oil price has renewed international focus on his company's Fischer-Tropsch technology in the fields of CTL and gas-to-liquids (GTL).

"Many oil poor, coal rich countries from all over the world are expressing increased interest in CTL," he said.

He said Sasol saw CTL as an emerging opportunity "driven by growing imports of crude oil into China and world-wide concern regarding the security of oil supplies."

Sasol now operates the world's only commercial scale synthetic plant at Secunda near Johannesburg, where it produces 150,000 barrels of liquid fuel per day.

The company is currently constructing the first commercial scale GTL plant outside South Africa in Qatar, which will commence producing ultra clean diesel and naphtha in 2006.

Source: Xinhua