Shenhua seeks A shares, coal-to-oil projects-paperadmin
China Shenhua Group will transfer more coal and oil assets to its listed arm, Shenhua Energy Co. Ltd. , and plans to float domestic A shares in three to five years, the China Securities Journal reported on Friday.
The group was building eight coal liquefaction plants in four northern provinces to win 30 million tonnes of oil each year by 2020, the China Daily said in another report.
The additional coal and oil businesses “will be gradually injected into the listed company in the coming three to five years to achieve the listing of the whole group,” the paper quoted Chen Biting, chairman of China’s largest coal producer, as saying.
The group owned coal production facilities with a capacity exceeding 50 million tonnes a year in the north regions of Inner Mongolia, Ningxia and Xinjiang, said the paper.
China is the world’s top producer and consumer of coal.
The China Daily quoted Zhang Yuzhuo, in charge of Shenhua’s coal liquefaction business, as saying it planned to tie up with foreign companies, such as Royal Dutch Shell Plc. and South Africa’s Sasol Ltd. , for liquefaction technology.
“We have almost finalised talks with South Africa and will possibly sign a deal with them sometime next week,” Zhang said.
Early this month, Japan’s Nihon Keizai Shimbun said Tokyo would also provide China with technology for turning coal into such liquid fuels as gasoline in an attempt to relieve rising world oil demand.
Zhang said the plants would be in Shaanxi, Inner Mongolia, Xinjiang and Ningxia, and that the first three plants, with total annual capacity of 4 million tonnes, would be completed by 2010.
He said building an coal-to-oil facility with an annual capacity of 10,000 tonnes would require an investment of 100 million yuan ($12.5 million) — or at least seven times of an oil refinery or other petrochemical plants.
But Zhang said: “If crude oil prices stay above $40 a barrel, we will see our investment returned within eight years.”