Friday, 6 November 2009

China oil firm in push for green car

Wednesday 4/11/2009 Page: 43

CHINA National Offshore Oil is considering building battery changing stations for electric vehicles, part of a broader push by the state-owned oil giant that could give a boost to alternative vehicles in China's huge market. Shan Lianwen, director of corporate strategy at China National Offshore, one of three big Chinese-government oil companies, said it was looking into the possibility of building a nationwide network of battery-changing stations, where drivers of electric vehicles could swap out an empty car battery for a full one.

China National Offshore is one of several Chinese oil companies undertaking alternative energy projects. "We can't build a car, but we can supply the energy," Mr Shan, whose company is the parent of CNOOC, which lists shares in Hong Kong and New York, told reporters on the sidelines of a conference yesterday. China National Offshore in July invested 5 billion yuan ($810 million) in Tianjin Lishen Battery Joint Stock, a Chinese company that makes lithium batteries for electric vehicles. Lishen said it would use the investment to build 20 battery assembly lines at a new facility in the port city of Tianjin.

Lishen has a joint venture with Coda Automotive, a California based company that is planning to sell an all-electric car powered by Lishen's batteries in California in late 2010. China National Offshore's foray into battery-powered car technology comes amid similar moves by big Western oil majors like Exxon-Mobil. The battery "filling stations" concept for electrified cars seems similar to the business model pursued by Better Place, a Palo Alto, California, company. Better Place is developing battery-swapping stations in Israel and Denmark, and last year announced plans for a $US1bn network of recharging stations for electric cars in the San Francisco Bay Area as part of a broad push into the US.

The closely held company, founded by former SAP executive Shai Agassi in 2007, also has announced plans to expand into Australia. Chinese oil companies have undertaken a number of alternative-energy initiatives, encouraged by a government mandate to reduce greenhouse gas emissions and dependence on foreign oil. China National Offshore is also building an offshore windfarm. China National Petroleum, the country's biggest oil-and-gas producer by volume, is a partner in a fledging carbon exchange market in Tianjin.

And Sinopec Group, or China Petrochemical, the country's biggest oil refiner, is involved in making cleaner-burning petrol out of coal. Mr Shen of China National Offshore said the feasibility of developing battery-filling stations in China depended on electric vehicles getting popular enough to support the new business. He said Chinese consumers would buy electric vehicles if petrol prices stayed above eight yuan or $1.30 a litre,, about 20% higher than current levels. Another factor is the ability of manufacturers to make inexpensive and reliable batteries.