China’s biggest coal miner – China Energy Investment – said it will spend CNY170 billion (US$24 billion) to build an integrated plant in the northwestern region of Xinjiang that will turn coal into oil products. Construction of the plant commenced this month.
The core process is based on domestically developed, independently patented second-generation direct coal liquefaction technology, which will be applied in the clean and efficient utilisation of coal, according to the company.
The facility, which will be located in Hami city and run on renewable energy, will have a capacity of 4 million tons of oil products annually. The first phase of the plant is slated to come online in 2027.
Bloomberg noted that the timing of the new plant is risky. China’s coal-to-oil capacity rose 24% to 11 million tons in 2023 compared to 2019. However, coal-to-oil profits slumped 53% last year, according to the China Petroleum and Chemical Industrial Federation.
Sources: Bloomberg and China Energy Investment