Sasol, the world's largest maker of oil from coal, is in talks with Chinese oil major Sinopec on coal liquefaction projects, said Chinese Commerce Minister Bo Xilai yesterday.
China is encouraging coal-to-liquid projects to reduce its dependence on imported oil, but some officials have expressed concerns that the technology might use too much water.
"Sinopec and other companies are cooperating with Sasol to explore indirect coal-to-liquid technology," Xilai told an energy conference in Taiyuan, in the coal-producing province of Shanxi.
He did not specify whether he was referring to Sinopec Group or Sinopec Corp, its listed arm.
China already has a number of coal-to-liquid projects under development.
Sasol is involved in at least two of them.
Shenhua Group, the world's top coal producer, expects to start up a major plant using its own direct coal liquefaction technology in northern Inner Mongolia next year.
Shenhua, parent of Shenhua Energy, is working with Sasol on two other projects in the northwestern provinces of Shaanxi and Ningxia.
Those projects, expected to start in 2012, will both use Sasol's low-temperature Fischer-Tropsch technology. - Reuters