Sasol’s study on synthetic fuels for China ready soon

SASOL, the world’s largest syn thetic fuels producer, could commission two plants that converting which would convert coal into liquid fuels in China as soon as 2010 or 2011, executive director Pat Davies indicated said yesterday.
Businessday (Africa)

01 March 2005
Sasol’s study on synthetic fuels for China ready soon
Carli Lourens – Trade and Industry Editor

SASOL, the world’s largest syn thetic fuels producer, could commission two plants that converting which would convert coal into liquid fuels in China as soon as 2010 or 2011, executive director Pat Davies indicated said yesterday.

The group was also study ing opportunities to erect coal- to-liquid fuel plants in the US, Davies told analysts who were at the group’s operations in Qatar on a site visit.

A feasibility study into the Chinese projects would be completed by the end of the year and the anticipated start- up in 2010-11, said Davies.

Sasol has identified Ningxia Autonomous region and Shaanxi province, both in the coal-rich western part of Chi na, for the projects that could each produce 70000-to 80000 barrels a day.

At these production levels, the combined output of the Chinese plants would be equal to Sasol’s total output of 160000 barrels a day from all of its coal to liquids operations in SA.

The combined value of the Chinese projects has been estimated at about $6bn.

Davies said the growth of imported crude oil into China and the US, together with con cerns over the security of oil supply, presented opportu nities for Sasol to expand its coal-to-liquids footprint expertise globally.

Both China and the US had large coal reserves, he said. pointed out.

Sasol hosted a site visit for analysts at the group’s Oryx plant in Qatar, which would convert natural gas into 34000 barrels of liquid fuel a day.

The first product to come from the Oryx plant, which is still under construction, was expected early next year.

Chris Turner, GM of Oryx, told analysts that Qatar was the best location globally for a gas- to-liquids plant due to its po litical stability, access to mar kets and its large gas reserve, which comprised was about 9% of total world reserves.

Referring to Qatar as the “gas-to-liquids capital of the world”, Turner said that the country also offered competi tive operating costs, which were among other benefits.

Sasol is aiming to develop gas-to-liquids plants together with partners worldwide to de liver 500000 barrels a day from three or four “foundation plants in key locations”.

Davies said Sasol was also looking at opportunities to build gas-to-liquids plants in Australia and Iran.

Plans are also afoot for a gas- to-liquids facility project in Nige ria, but the project has been delayed by red tape.

Sasol, which will release financial results for the six months to December on Monday next week, expects earnings a share to rise 45% and headline earnings a share to increase 60%.

Sasol said in a trading update last week that the benefit of higher oil prices was more than offset by the impact of adverse currency effects. However, the performance of its chemicals portfolio was substantially better due to improved margins and heightened focus on core businesses.

The share closed up 3,18% to R146 with over 3,8-million shares traded.