Shell rethinks Chinese projects

Royal Dutch Shell P.L.C. is delaying or dropping some alternative-energy projects in China as too costly, given current oil prices, executives said. Lim Haw-Kuang, executive chairman of Shell Companies in China, said that because of the economic downturn, it decided to postpone a joint venture with Shenhua Group Corp. Ltd., China’s top coal producer and parent of China Shenhua Energy Co., to turn coal into liquid fuel. Shell had conducted a feasibility study with Shenhua to build a coal-to-liquid plant in the country’s western Ningxia Autonomous Region. Shenhua has been independently pursuing coal-to-liquid projects with its own technology in the country’s Inner Mongolia region, but the collapse of oil prices and China’s scarcity of water resources has made many of these projects unviable. (April 14, 2009)