Sasol, the top energy firm in South Africa, is entering a crucial phase in planning for its two giant coal-to-liquid (CTL) projects in China.

"Now we are in the second stage of feasibility studies for our two CTL projects," said Chen Liming, executive vice-president of Sasol China.

The current study will determine details in capital costs, feedstock costs, water supplies and market conditions and will outline most of the major commercial and funding issues, said Chen.

Sasol began planning with Shenhua Group Co Ltd and Shenhua Ningxia Coal Ltd for the two CTL projects in 2004. It finished preliminary studies at the end of 2005.

The studies confirmed that key elements are in place for establishing a viable CTL business in China using Sasol's low-temperature Fischer-Tropsch technology, said Chen.

Sasol's two projects one in Yulin, Northwest China's Shaanxi Province and another in the Ningxia Hui Autonomous Region are designed to produce 80,000 barrels of liquid fuels per day and represent the company's largest investment outside of South Africa.

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