China will lift the coal to the oil industry boom

Author:ANROSOFT_market survey report Company,market survey report services.( http://anrosoft.com )

Because of the current global oil prices at historic highs, China is to promote a controversial project: its rich coal resources reserves into barrels of oil per barrel.
This coal oil (CTL) process has been criticized by environmentalists, they claimed it would produce excessive greenhouse gases.

China is a country rich in coal resources, when all over the world in oil reserves on whether to support the discussion of when to start, China is also seeking to ensure its energy supply safety measures. Thus making coal and fuel oil to the possibility of self-sufficiency is still very tempting.

The United States, Australia and India are also considering the development of CTL technology, it is subject to the concerns of environmental issues, and the Chinese in this respect is much less resistance. At present, China is a large-scale construction in Inner Mongolia steppe of the CTL plant.

Mitsubishi Research Institute (MRI) is responsible for the energy business, chief consultant for Reuters, said Yuichiro Shimura “CTL because of its help to ensure energy security, therefore, like South Africa, China or the United States this country rich in coal reserves are very keen on the development of CTL technology of. However, the problem is, it will emit a large amount of carbon dioxide, but also a large number of required energy for liquefaction, which means it has to waste a lot of energy. ”

Ordos in Inner Mongolia, about 10,000 workers into the construction of CTL plants. Upon completion, the plant will be China’s largest coal mining group – the Shenhua Group in charge of operations, it will become the world’s largest outside South Africa CTL plant.

The plant will begin this year, six months after the operation, with an estimated annual 3.5 million tons of coal will be converted into diesel fuel, such as one million tons of petroleum products, including. One million tons equivalent to 20,000 barrels per day oil production, and that Chinese demand for crude oil accounts for only a small part. With the China National Petroleum (love stock market, IT) consumption growth, China’s daily consumption of 720 million barrels of crude oil.

If all goes well, Inner Mongolia will continue to promote the program continue, by 2010, will be half of its coal output into liquid fuel or chemicals. The production is about 135 million tons, accounting for Australia’s coal production of 40%.

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China since early 1999 at the beginning of the operation of 500,000 tons of Pingdingshan in Henan coal to oil projects (after the grounding). 2001 National 863 plan and also initiated the “coal to oil” research demonstration project, considerable progress has been made so far. China Shenhua Group is the lead production in the Ordos 5,000,000 tons project was started in August 2004, will be put into operation in 2007, projects a total investment of 60 billion yuan. The second phase of the project after the output is 10 million tons. Shenhua said to have been planning to earlier planned 10 million tons to 30 million tons, or even a higher scale of production. Shenhua and generous feat on in the international . It is estimated that China’s current construction at the proposed “coal to oil” project has reached 16 million tons, plans to invest the funds at about 160 billion yuan. Provinces will be a lot of “coal to oil” project as a key development projects. Feasibility studies of these projects, without exception, substantial benefits that the project can go up quickly. Someone said that almost every large-scale production of coal has a place, there are people in the planning of “coal to oil” project. Seeking truth from facts that the Government is quite clear on this, no matter what the reasons are, at present has been approved by the “coal to oil” little projects.

“Coal to oil” to China, has its far-reaching strategic significance of energy security. It can reduce dependence on oil imports, a strategic oil reserve should be a supplement. From this standpoint, the Government should be the long-term Chinese demand for oil has a more reasonable prediction to determine the acceptable degree of dependence on imported oil, thereby planning “coal to oil” of the scale, according to coal, water resources and possible environmental to determine the effects of “coal to oil” of the project site. Here, must control the “coal to oil,” the scale is the key. Can not let the name of places and businesses to consider national energy strategy for the banner, too fast, large-scale ground “coal to oil” project.

“Coal to oil” may be brought to China, another advantage is that the scale “coal to oil” scarcity of oil will reduce the expected decline of oil prices or rising slower. Every one dollar decline in oil prices to the current volume of imports, China can pay less one billion U.S. dollars. If the countries, especially the United States and China, “coal to oil” on many investment projects, the production capacity is large enough, the price of coal will rise, oil prices down; after all, the current high oil price has nothing to do with the exploitation cost, high – price reflects the expected demand for oil and the corresponding scarcity. Extreme to say that if, as it was suggested that, as oil demand in the United States should be resolved through “coal to oil” from me to meet, then the scarcity of oil will no longer exist, a substantial decline in oil prices can, because the world oil costs (including exploration and exploitation costs) is still very low, OPEC oil production cost of 6 U.S. dollars / barrel, the global average of less than 15 U.S. dollars / barrel. For capital-intensive, the enormous investment in “coal to oil” projects would be a devastating blow. Therefore, the “coal to oil” is probably a trap.

“Coal to oil,” the fundamental advantage of the rich coal reserves, sophisticated technology and strong in financial capital, have sufficient water resources. This number, such as the United States are not Chinese. It is important to note, in the “coal to oil” on the project scale, the Chinese not to go to go in front of American. I believe that the international oil-importing countries have much hope that other countries will be the “coal to oil” go on quickly and even help you look (such as Japan). They only have the benefits, there is no risk.

Japan, Germany, and other European countries obviously do not have the advantages of coal resources. However, for China’s “coal to oil” than the United States competitive, there is no convincing enough. Different from other developed countries, apart from the United States technology is mature and strong in financial capital, the key lies in the rich coal reserves and water resources, which are in other countries (including China) and the ratio can not be. Although the coal reserves in China compared to many other forms of energy, but less per capita resources of coal. It is estimated in accordance with the current coal production and use of methods can be directly used only to maintain the coal resources of 30 years. Large-scale coal into oil, will increase the expected scarcity of coal. To current estimates, one tons of oil for at least 3 tons of coal required, may be four tons. The problem is, if combined with other industries the rapid growth of coal demand, coal prices in recent years, rapid growth is a repeat of the situation? If a repeat, except the “coal to oil” have a significant impact on the project, to other coal industry, the national economy as a whole will have a negative impact. Coal market prices and labor costs, the United States to illustrate the development of “coal to oil” does not have the competitive edge, but also not convincing. The United States has the world’s largest recoverable reserves of coal, accounting for about 25% of the world’s total; coal recoverable reserves per capita are 5.8 times China’s. Therefore, rich in coal resources of the United States and not very rich in coal resources in China, where long-term coal prices high, not low-Say there. Hang in recent years the domestic coal prices have gone up by several times, if the Chinese coal prices also rose as the last few years so that five years later, is also a price advantage? In addition, comparison of the cost of Factory is a misunderstanding; the United States wages of workers in the wage level is a lot of Chinese workers. Chinese workers are cheaper, but because of “coal to oil” is a capital-intensive industry (only one device, producing 10,000 tons of oil required to invest 1 billion), the cost advantage of the workers can easily be offset by management efficiency.

“Coal to oil” is a major environmental pollution problem. However, the “coal to oil”, caused by the carbon dioxide can have technology to its safe storage in the ground, as long as there is enough profit margin is more or less solve the “coal to oil” problem of environmental pollution. However, the “coal to oil” Another big problem for China, it is more difficult. It is estimated that 1 ton of oil to be transformed into 10 tons of water consumption, water consumption is 10 times the fuel. “Coal to oil” projects will be built mostly coal shortage in the north many areas, such as Shenhua in Inner Mongolia. The ongoing ‘coal to oil’ of Shanxi, Shaanxi, Inner Mongolia is China’s most serious water shortage in the region. The cost of water resources in these areas also can not reflect the scarcity of “coal to oil,” the project will exacerbate the lack of water resources in these areas. If the future of water in these areas such as oil “expensive”, then “coal to oil” can be?

For China to control the “coal to oil” is another of the scale are not to respond because of the scarcity of oil and accelerate the scarcity of coal. For the scarcity of coal in China, at present not fully recognize. Over the past 5 years, coal consumption in China could double up to 2.2 billion tons this year. Coal demand growth requires us to recognize the dynamic of the scarcity of coal, we need to have a sense of crisis. If we think of the Chinese coal are scarce, then the “coal to oil” is a scarce resource to change a scarce resource, conversion between a lot of waste of scarce resources. If more than four tons hot at 5000 kcal / kg of high-quality coal into 1 ton 10000 kcal / kg of oil, “coal to oil” energy waste by half. Of course, if the “coal to oil” are used to import coal, can be used as another theory.

For a single energy companies, even relatively low-cost coal resources is based on the price has been, the risk still exists. Whether or not except to maintain oil prices at high, but also depends on the country’s resource tax, water prices and the cost of environmental protection policies. China’s coal, less than the cost of water reflect the scarcity of resources. With the development and utilization of coal to improve the management of the continually increasing demands of environmental protection, coal price will further rise. China is the world’s 13 most water-scarce countries, economic development will enable the higher water prices. If there is no national policy or the possible subsidies, “coal to oil,” the long-term commercial risk.

The latest market —- 1 Yanzhou Coal Mining (600188) plans to invest Yankuang Group, the parent company of coal to oil projects.

Reporter confirmation: Company securities company staff that there is no such timetable, the company should not now about to enter the project must, but it can also agree with the consent of the majority of investors. The project also now there is no specific start construction, is also submitted for approval to the National Development and Reform Commission, and other related procedures is still in progress. Pre-investment in the company projects a total of 2 sets of methanol production line, a 100,000 tons annual production capacity of the project has just started trial production, the main production line test, followed in order to determine whether the normal operation, while another 300,000 tons to annual output of the project at 3 quarter began trial operation, the impact on the performance of the company, at this stage can not be calculated. Stable operating conditions of the company during the first half, by Center Daily News in advance, but the specific amount of money or have to wait out the financial data, the company will be announced.

The latest market to enter the mainland Garden —- Two new coal-oil business

According to media reports in Hong Kong, Country Garden Chairman Yeung Kwok-keung a minimum of three recent female name, large-scale coal enter the mainland’s emerging oil business, new business from the two-in-law leader Chen Chong, a short span of one year in three projects, local government commitment to invest huge sums of money have been more than 13 billion yuan (RMB. the same below), the rapid and decisive hand, even the energy sector in the Mainland for the amazing people who know it well, too.

Son-in-law into the high oil prices positively encourage

“Coal to oil” is in fact low-cost coal into liquid fuels technology, commonly known as, the current international oil prices hit record peaks, much to the good prospects, but also to attract the parties therefore “rich” mouth-watering. However, Mr Yeung Kwok-keung to spend more than billion in the acquisition of Shaw (0080) at the same time, but more than 10 billion yuan of investment into the energy industry, it is very aggressive on the Young’s surprise.

According to sources, Mr Yeung Kwok-keung king is determined to the embodiment of energy, the main reason positively encourage the son-in-law into the two. At present, the two female Yang Yang Yan commissioned by the family holds near Garden of the rights and interests of 58.5%, the market value of over 480 billion, which is the richest man in China, and Yang Yan husband, at his home in Harbin, Chen Chong, also at Garden in the early years effect, the main force responsible for new business development. However, Department of Chemical Engineering, Tsinghua University graduate, followed by the United Kingdom to study chemical engineering, University of Manchester Institute of Chen Chong, suddenly left the Garden last year, and as a company named “Foshan Shunde ChuangYuan Investment Limited” to the general manager.

Female 90% stake holders into a one-in-law

According to information received by this newspaper, the “investment ChuangYuan” 90% owned by just graduated from university this year, only 21-year-old female small holders of China, Chen Chong just took the remaining 10 % stake.

Mr Yeung Kwok-keung and I once denied that he intended to enter the Garden of coal to the oil industry, was on a visit to the reporter last week, Taiwan’s him, he initially said: “The Garden City Department of listed companies, if there is (to do coal to oil) to published, you have not seen the announcement? “When a reporter whether he further inquiries to be done on behalf of my daughter, he immediately demonstrated surprised journalist asked,” the newspaper reported it? “and then drag their feet and said,” I do not have each of the private investment an explanation to the media, right? “to my daughter about why the name of investment, have been satisfied smile but not FOR.

Ask and Answer report instead of Yang Xiao

“ChuangYuan investment” at the beginning of last year after the establishment of that coal to oil to negotiate large-scale projects, from just one year since last year, has been signed with three local governments and construction phases, three sub-offices Shenyang, Liaoning, Inner Mongolia Zhaotong Tongliao and Yunnan. Although not the size of the initial operation, but definitely a lot of money to invest, at least a rough estimate cost of 130 million, and the three projects to achieve long-term goal of mass production, capital investment will be up to hundreds of billions of dollars more. Yunnan project more to the person in charge of the mainland media, the future of the coal to the oil business will be listed separately in order to finance the expansion of production capacity.

Satisfied within a short span of a year that tens of billions of investment into the coal to the oil business, the Mainland has the energy industry analysts fear this great service, “Shenhua (1088) of the coal to oil projects are more than 10 billion spent, however, aim However, annual output of more than 3,000,000 tons.”

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