CNOOC to build coal-to-gas plants with DCM

CNOOC New Energy Investment Co. Ltd. on May 15 signed a contract for a coal gasification project with Datong Coal Mine Group (DCM). CNOOC New Energy, a wholly-owned subsidiary of China National Offshore Oil Corp. (CNOOC), said it will cooperate with DCM on a project in Datong City, Shanxi Province, that will include building plants to produce four billion cubic meters of coal-based natural gas and other by-products such as diesel fuel and gasoline. The two companies will also build two coal mines that will have an estimated annual capacity of 10 million tons and a washery to support its coal-gas plants. The entire project is expected to cost about RMB 30 billion (US$4.40 billion), and is expected to generate sales revenues of RMB 26 billion (US$3.8 billion) annually. It is expected to be finished in three years. CNOOC will hold a controlling interest in the project, while DCM will take charge of the mines. However, the two companies have yet to announce their shareholding ratio. (April 29/ May 18, 2009)