CNOOC in 30 bln yuan coal-to-gas venture

Special Report: Global Financial Crisis

BEIJING, May 6 (Xinhua) -- China's top offshore oil and gas producer is in cooperation with a coal mine group to invest 30 billion yuan (about 4.4 billion U.S. dollars) in a coal-to-gas project in Shanxi province of central China, Wednesday's China Daily reported.

CNOOC New Energy Investment Co Ltd, a wholly owned subsidiary of China National Offshore Oil Corp (CNOOC), and Datong Coal Mine Group from Shanxi will put the investment in a coal-to-gas plant with an annual capacity of four billion cubic meters of natural gas, according to the report.

The project would also include the construction of supporting projects including two coal mines, each with an annual output of 10 million tonnes, relevant coal washing mills and coal gangue-fired power plants, said CNOOC.

Apart from natural gas, the plant will also produce diesel, gasoline and other chemical products, the company added.

The project aims to tap Datong's vast coal reserves and increase the supply of clean and reliable energy not only to Shanxi, but also regions such as Shandong, Liaoning, Hebei and Tianjin, China's engines of growth.

As one of the most advanced ways of clean coal utilization, the coal-to-gas project will lead to energy savings, and a clean, highly-efficient and low emission environment, said the company.

It is also estimated that the coal-based clean energy project will bring about 26 billion yuan in sales for CNOOC and Datong combined.

This project would be a win-win deal for both oil and gas enterprises and coal firms, said Zhou Shouwei, vice-general manager of CNOOC.

The detailed timetable for the construction and plant operation had not yet been disclosed.