Foster Wheeler/Huanqiu JV Awarded Coal-to-Liquids Study Contract

Foster Wheeler Ltd's UK subsidiary, Foster Wheeler Energy Limited, in a joint venture with China Huanqiu Contracting & Engineering Corp., has been awarded a feasibility study Stage I contract by Sasol Synfuels International (Proprietary) Limited (Sasol) and its Chinese partners, China Shenhua Coal Liquefaction Corporation Ltd. and Ningxia Luneng Energy and High Chemistry Investment Group Co., Ltd. (jointly called "the Combined Chinese Working Team").

The contract is related to two 80,000 barrels per day coal-to-liquids (CTL) facilities to be located at Ningxia Autonomous Region and Shaanxi Province, respectively, both in the coal-rich western part of the People's Republic of China.

"Foster Wheeler is delighted to be awarded this contract by Sasol and the CCWT," said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy Limited. "This first use of Sasol's CTL technology outside South Africa builds on the relationship developed over the last eight years between Foster Wheeler and Sasol, optimizing and engineering the application of Sasol's gas-to-liquids (GTL) technology in the global marketplace, and on our long track record of delivering successful projects in China.

Coal-to-liquids is a key part of the Chinese government's energy strategy, and we are pleased to be involved at the early stages of its implementation and to be involved with other companies so well-placed to ensure its rapid and commercial development," continued Mr. Davies.

Coal-to-liquids comprises an integrated process for the conversion of coal into selected fuel products such as diesel, naphtha and liquefied petroleum gas by using a combination of three principal processes, i.e., gasification of coal to synthesis gas, conversion of gas-to-liquids and hydrocracking the converted products into fuel products. The three processes will involve separate technologies, central to which is Sasol's low-temperature Fischer-Tropsch technology for the conversion of synthesis gas to liquid fuels.

The Foster Wheeler/Huanqiu joint venture will evaluate the available technologies for the projects and complete feasibility study Stage I work to integrate these with the associated utilities and infrastructure systems in order to maximize the value of the project to its shareholders. Huanqiu will provide gasification experience together with the essential local technical, commercial and legislative information to ensure the study conclusions are robust.

The study is scheduled for completion by the end of the year.

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Posted 11/04/05

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