|CTL development in China.
Sasol today signed a co-operation agreement with a consortium led by China’s Shenhua Corporation for proceeding with the second stage of feasibility studies to determine the viability of an 80,000 barrels per day (bpd) potential coal-to-liquids (CTL) plant in the Shaanxi Province, about 650 kilometres west of Beijing.
Sasol yesterday signed a similar agreement for another 80,000 bpd CTL project in the Ningxia Hui Autonomous region with Shenhua Ningxia Coal Ltd. The combined capacity of the two Chinese plants are roughly equivalent to that of Sasol’s existing Secunda facility in South Africa.
Each plant is expected to cost more than US$5 billion. Should these CTL projects go ahead, they could be brought into operation as early as 2012.
Following the signing, Sasol made a presentation to Chinese Premier Wen Jiabao on the value proposition of CTL for China. The Premier is on an official visit to South Africa.
We are highly appreciative of the Chinese Government’s keen interest in the projects.—Pat Davies, CEO Sasol
Sasol suggests that there are five key drivers required for a viable CTL project:
Access to large reserves of low-cost gasifiable coal (approximately 2-4 billion tons) at proposed location, or to stranded coal (e.g. due to quality or location) which can not be easily monetized in other ways.
The country should be a net importer of energy (crude oil and/or refined products).
Energy self-sufficiency should be of strategic importance to the Central Government and there should be willingness/ability to make necessary incentives framework available.
Site for CTL facility should preferably have infrastructure to support such a venture.
Opportunities for CO2 management.
Sasol says that the initial pre-feasibility studies confirmed that all those key drivers are in place for establishing a viable CTL business in China using Sasol’s low-temperature Fischer-Tropsch technology.
The second stage feasibility studies will go into more detail in determining capital cost, feedstock cost, water supply and market conditions and will also determine most of the major commercial and funding issues. Sasol intends to be an investor, not solely a technology provider.
In developing new CTL plants, Sasol’s objective is to design carbon-capture ready facilities, which can significantly reduce greenhouse gas emissions.
Sasol is involved in two major Gas-to-Liquids projects outside of South Africa: Oryx GTL (34,000 bpd) in Qatar, and Escravos GTL (34,000 bpd) in Nigeria. Sasol is also investigating CTL opportunities in the USA and India.