China Shenhua shows profits in first half

China Shenhua Group posted profits from it direct coal-to-liquids (CTL) project in the first half of the year. This has fueled hopes that the world’s second largest oil consuming country may consider expanding into alternative fuel production. China Shenhua Group is a state-owned company and is the parent company of China Shenhua Energy Co., which is China’s biggest coal producer. For the first half of the year, it produced 470,000 tons of oil products from coal. Since February, Benchmark Brent crude prices was about US$100 a barrel, but according to Shenhua Group’s General Manager Zhang Yuzhuo, costs of the fuel produced by the company were equivalent to crude oil prices of less than US$60 a barrel. Zhang said that the CTL demonstration project has been in continuous operation since November last year and has a fuel production capacity of 1.08 million tons per year. In the first six months, Shenhua had earnings that reached 800 million yuan (US$125.1 million) before taxes from the CTL direct project in Erdos, Inner Mongolia. Later this year, the company plans to start building a 56.5 billion yuan (US$8.8 billion), 3 million ton per year plant in northwestern Xinjiang. (September 8, 2011)