Japan to provide China new coal use technology-Nikkei

TOKYO, June 10 (Reuters) Japan is set to provide China with technology that uses liquefaction of coal to produce fuel such as gasoline, an attempt to relieve rising world energy demand, the Nihon Keizai Shimbun (Nikkei) said on Saturday.

The growth of emerging economies such as China has made the demand for energy an increasingly pressing issue in Asia, with one of many disputes between Japan and its giant Asian neighbour centring on development of gas fields in the East China Sea.

The new technology produces petroleum fuels such as gasoline and kerosene by subjecting powdered coal to heat and pressure, the Nikkei said.

An independent agency under Japan's trade ministry, the New Energy and Industrial Technology Development Organization (NEDO), will join with two Chinese energy firms as early as next month to test the new technology, aiming to commercialise it by 2010.

If all goes well, by that year the Chinese firms will have set up a plant able to process 3,000 tons a day at a cost of 100 billion yen (8.1 million), with NEDO receiving fees for the use of the technology.

The Nikkei said that Japan was also in negotiations for similar cooperation with Indonesia and was considering doing so with India, Mongolia and the Philippines.

Japanese trade ministry officials were not immediately available for comment.

Japan has been working to develop coal liquefaction technology since the 1980s, but its relatively high cost kept it from being a practical option until recently, when world oil prices shot up, the Nikkei said.

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