YahooBusinessNews: Shell to supply clean coal technology to China's Shenhua, Ningxia Coal Group: "Shell said it believes it is important for China's energy future for the country to process and burn coal in a cleaner, more environmentally sustainable way.China, the world's second-largest oil consumer after the US, has been a net importer of oil for the last 10 years as domestic supplies fail to keep up with soaring demand. The country's fast-growing economy is driving a rapid rise in energy consumption."
(ShellNews.net) 16 Nov 04

BEIJING (AFX) - Oil giant Royal Dutch/Shell Group (LSE: SHEL.L - news - msgs) said it has signed a memorandum of understanding with China's largest coal company Shenhua Group Corp and Ningxia Coal Group to provide clean coal technologies to both coal producers.

Shell's coal liquefaction technology will allow the two companies to transform coal into compound gases that with the addition of catalysts can be turned into liquefied fuels.

Shenhua Group plans to invest 30 bln yuan to build a coal liquefaction plant in western China's Shaanxi province, of which liquefied fuel output in the first phase is expected to reach 3 mln tons, a statement from Shell said, without giving details.

State-owned Ningxia Coal Group will also spend 30 bln yuan to set up a similar coal liquefaction plant in Ningxi Hui Autonomous Region with an annual output of 3 mln tons.

Shell will jointly spend six to nine months with Shenhua Group Corp and Ningxia Coal Group to conduct a thorough feasibility study into the two proposed plants, the statement said.

Shell said it believes it is important for China's energy future for the country to process and burn coal in a cleaner, more environmentally sustainable way.

China, the world's second-largest oil consumer after the US, has been a net importer of oil for the last 10 years as domestic supplies fail to keep up with soaring demand. The country's fast-growing economy is driving a rapid rise in energy consumption.

China's total oil consumption is expected to reach 308 mln tons this year, up 22 pct from 252.32 mln tons last year, Xinhua news agency reported earlier, citing an analyst with China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP).

Along with ongoing crude oil price hikes, China has had to reduce its reliance on imported oil, which is estimated to exceed 110 mln tons this year, according to a research report from the China Petroleum and Chemical Industry Association (CPCIA). (1 usd = 8.3 yuan)

sharon.wu@xinhuafinance.com ws/ap/cas

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