Netherlands-based Shell Gas and Power Developments BV and Shenhua Ningxia Coal Industry Company Ltd. (Shenhua-Ningmei) have recently signed an agreement on joint study of coal liquefaction technology in Yinchuan, capital of northwest China's Ningxia Hui Autonomous Region.

Under the accord, the world's leading gas company will work together with Shenhua-Ningmei on the technological and commercial feasibility for launching an indirect coal liquefaction facility with a daily production capacity of 70,000 barrels of oil products and chemicals at the Ningdong coal production base, one of the 13 major such bases approved by the Chinese government.

Lim Haw Kuang, executive chairman of Shell China operations, said that as a leader in clean coal technology, "We have proven technology that converts coal to gas and then gas to liquids. We believe this technology is important to China, particularly in large coal-producing areas such as Ningxia."

Zhang Wenjiang, chairman of Shenhua-Ningmei, said, "Ningxia is not only rich in coal but in water and power supply, which are all important for the successful development of an indirect coal liquefaction project."

Shenhua-Ningmei is the principal investor and constructor of Ningxia's Ningdong base. Capital construction has begun at the base for the indirect coal-to-liquid project, Zhang added.

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