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AFX News Limited: Shell, China’s Shenhua Coal to invest 6 bln usd in coal to liquid plant – report

BEIJING (XFN-ASIA) – Shell Gas and Power Developments BV and Shenhua Ningxia Coal Industry Co Ltd will jointly invest 6 bln usd in a coal-to-liquids plant in northern China’s Ningxia Hui Autonomous Region, the Economic Observer reported.

Citing Lim Haw Kuang, executive chairman of Shell in China, the newspaper said Shell will offer its proprietary techniques for the project and a preliminary feasibility study on the project will be completed within three years.

Lim was quoted as saying China will hold the majority stake in the project, adding that ‘Shell will also take quite a big interest in it,’ without providing further details.

Earlier media reports said the plant would be built in the Ningdong coal center — one of 13 major coal centers approved for construction by the Chinese government — and would have a daily production capacity of 70,000 barrels of oil and chemical products.

Lim said oil products from the project will be sold in China, according to the newspaper.

The Ningxia Hui Autonomous Region supplies China with two-thirds of its primary energy needs.

Shell has sold 15 licenses for its coal gasification technology to Chinese companies and is currently constructing a joint venture plant with China Petroleum & Chemical Corp (Sinopec).

(1 usd = 8.00 yuan)

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