Sasol in Talks With Sinopec on Coal-to-Fuel Plans

09-19-2007

Sasol, the South African Co and the biggest coal-to-motor-fuel producer in the world, is in talks with Sinopec on coal liquefaction projects, the Chinese commerce minister, Bo Xilai, said.

Bo, speaking at a conference in northern China, did not specify whether Sasol's talks are with China Petroleum & Chemical, known as Sinopec, or its state-controlled parent China Petrochemical, known as Sinopec Group.

Sasol, based in Johannesburg, is in talks with "large" Chinese oil companies to distribute fuels in the nation's northwest, Chen Liming, executive vice president of Sasol's China unit said. Sinopec and PetroChina, both based in Beijing, are China's biggest fuel suppliers.

Sasol is building coal-to-fuel plants in the United States, China and India, where interest in the technology has increased as oil prices have risen. Oil closed above $80 a barrel in New York for the first time last week. Sasol's plants in China need an oil price of $40 a barrel or more to be profitable, Pat Davies, the chief executive officer, said last year.

Sasol and Sinopec were discussing using "indirect technology," Bo told the China International Energy and New Industry Expo in Taiyuan, capital of Shanxi Province, the country's biggest coal-producing area. He gave no further details.