Coal India Ltd (CIL) and Neyveli Lignite Corporation (NLC) have tied up with oil major Oil & Natural Gas Corporation of India (ONGC) for two pilot projects for coal gasification and liquefaction ?CIL and NLC have tied up with ONGC for two pilot projects for coal gasification and liquefaction. The work on the projects have already begun,? said a senior coal ministry official. CIL and ONGC?s project is coming up in Jharkhand, while NLC-ONGC pilot project is coming up in Rajasthan. Both projects will require an initial investment of Rs 100 crore each.
The coal ministry has already identified four blocks for allocation for coal gasification and liquefaction and geological studies are being carried out. The government has recently approved captive mining for production of gas through coal gasification and liquefaction.
Underground coal gasification aims at extracting energy from coal seams which cannot be mined through conventional methods. Additionally, underground coal gasification is considered to be clean coal technology, hence causes little damage to environment.
Coal liquefaction aims at converting coal to liquid fuels, for which commercially proven technology is available.
Both coal gasification and liquefaction are capital intensive and high technology areas, generally considered unviable. Even on a global scale, only few such projects are in operation.
However, South Africa has been successfully producing gasoline and fuel oil from coal for quite some time. The government also believes huge coal reserves of the country are amenable to coal gasification and liquefaction.
The government feels the recognition of coal gasification and liquefaction as end uses would give a fillip to development of technologies by the public sector as well as the private sector.
South African petrochemical major Sasol Ltd has plans to invest $6 billion in the coal liquefaction business in India. But the matter is stuck on the issue of coal block allocation. The coal blocks Sasol wants have been reserved for power projects. However, the Planning Commission is looking into the issue.