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China to Launch Project to Turn Coal into Oil
China will invest heavily in two projects which can turn coal into petroleum to ease the shortage of petroleum resources, said sources from the State Development Planning Commission.
The two projects will be constructed in Xianfeng Coal Mine in Yunnan, southwest China, and Shenfu Coal Mine in Shaanxi, northwest China. Costing a combined total of 20 billion yuan (about 2.4 billion U.S. dollars), the two projects can produce two million tons of petroleum annually.
Xianfeng Coal Mine, the first mine in China to experiment with liquefying coal into oil, has a wood-coal reserve of 292 million tons.
The project can produce 883,000 tons of petroleum, diesel oil and other sideline products annually. Calculating based on the current coal and oil prices, the project can earn an annual sales income of 3.4 billion yuan. The total cost of the project can be recovered in six years.
China has been importing oil since 1993. It will import more than 70 million tons of oil this year, and by 2010, the amount will be 100 million tons. However, China is rich in coal resources.
The proven reserve of coal is one trillion tons and its annual output is one billion tons.
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