HOHHOT - China's first direct coal-to-oil project, operated by the country's leading coal producer, Shenhua Group, produced 866,000 tons of oil products last year.

The direct coal liquefaction line is located in Ejin Horo Banner, Ordos city,?North China's?Inner Mongolia autonomous region. It produces 3,000 tons of oil products with consumption of nearly 10,000 tons of coal per day, said Shenhua Coal Liquefaction and Chemical Co Ltd.

With an investment of 12.6 billion yuan ($2.06 billion), Shenhua Group began construction of the project in 2004, using self-developed technologies.

The project began trial production at the end of 2009 with a designed annual capacity of 1.08 million tons of diesel, naphtha and liquefied petroleum gas.

Proven coal reserves around Ordos are estimated at 160 billion tons, or 11.4 percent of the country's total coal reserves.

As part of its clean energy strategy, China has launched a number of direct or indirect coal liquefaction and coal gasification projects in Inner Mongolia, Shaanxi, Ningxia, Xinjiang and Liaoning in the past three years.