Northwest China's Ningxia Hui Autonomous Region plans to invest more than 100 billion yuan (12.9 billion U.S. dollars) to build Asia's largest liquefied-coal base, according to the regional development and reform commission.

The first group of projects, designed to produce methanol and other chemicals from coal, are under construction in the Ningdong Chemical Resource Base, which is located near coal deposits containing 80 percent of Ningxia's known coal reserves, said Hao Linhai, director of the regional commission.

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Chemical plants will be able to convert more than five million tons of coal annually into chemicals such as dimethyl ether, olefin and methanol, which are fuel additives, he added.

Several plants that will turn coal into diesel fuel are now under construction and will go into production in 2020. They will be able to convert 50 million tons of coal into 10 million tons of diesel a year, said Hao.

"We are negotiating with South Africa-based Sasol and Royal Dutch Shell Group to introduce liquefaction technologies needed to produce diesel fuel," said Wang Jian, general manager of Shenhua Ningxia Coal Industry Group Co., Ltd.

Wang said they will invest 10 billion yuan (1.29 billion U.S. dollars) this year alone.

By 2020, the base will have a liquefaction capacity of 10 million tons and be able to produce 830,000 tons of methanol and 1.22 million tons of olefin, he said.

The area will become the largest coal chemical conglomerate in Asia, said company chairman Zhang Wenjiang.

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