Russian firms eye coal projects with China's Shenhua
ST. PETERSBURG. June 14 (Interfax) - Russia's Inter RAO UES and China's Shenhua could jointly develop the Mencherepskoye coal field in the Kuznetsk basin (Kuzbass), a Russian Energy Ministry official said at a conference in St Petersburg .
"There are plans to create energy and technology complexes, to enable the comprehensive development of coal fields. They include setting up clusters at the Karakanskoye (Belovskaya mine) and Mencherepskoye fields," said Konstantin Alexeyev, head of the ministry's coal department.
Inter RAO has signed a frame agreement with the Chinese company to supply all products from a proposed $1-billion coal-to-liquid plant to the Chinese market.
Alexeyev said Russian Fuel Company (OJSC Rostopprom) planned to sign a deal with Shenhua during the economic forum in St Petersburg June 16-18 to create a joint venture to develop a coal field in the Amur region.
"The papers are ready and we expect these sort of documents will be signed during Chinese leader Hu Jintao's visit to the St Petersburg forum," he said.
China could provide $6 billion in loans to aid the development of coal production and export infrastructure in Russia, according to a protocol which was signed at an August 30 2010 meeting of the Russian-Chinese energy cooperation sub-commission in Amur's administrative center, Blagoveschensk.
China hopes to boost its annual imports of Russian coal to 15 million tonnes in the next five years, and to at least 20 million tonnes thereafter. Russia's energy minister and chairman of the meeting, Sergei Shmatko, noted that this would make China one of the most attractive and strategic markets for the Russian coal industry.
The protocol also stated that Shenhua Group, one of China's major coal producers, intends to form a joint venture (JV) in order to develop the Amur region's Ogodzhinskoye coal deposit.
The Ogodzhinskoye field is thought to contain up to 20 coal seams at an average of between 3.5 and 18.5 meters wide. The absence of a direct rail link has stalled the project's progress, however.
A source familiar with the plans has told Interfax that $1 billion of the $6 billion would go into the Amur project and that the field might go into production by the end of 2011 once the license has been issued.
The state owns 72.75% of the shares in Rostopprom.