The companies said the project, in which Shell will have a minority stake, will require about three years of study before an investment green light is given.
The proposed plant will be located in China’s Ningxia region and will turn about 3.2 million tonnes of coal a year into fuels such as gasoline and diesel.
According to Reuters, Shell China executive chairman Lim Haw Kuang said the $5-6 billion investment figure was preliminary and the companies would have a better idea of capital investment as they progressed through the engineering design phase.
Plant start-up is expected by 2012.
