India’s state-owned firms plan four coal-to-chemicals projects

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Four state-owned firms in India plan to build coal-to-chemical projects as part of the government’s aim of utilizing 100m tonnes/year of coal for gasification by 2030.

Coal India Ltd (CIL), along with Indian Oil Corp (IOC), Gas Authority of India Ltd (GAIL) and Bharat Heavy Electricals Ltd (BHEL) will build the projects and will jointly set up the surface coal gasification projects as part of the plan, the Ministry of Coal said on 23 September.

The projects will “convert coal into syngas that can be subsequently processed for downstream production of value-added chemicals which are produced through imported natural gas or crude oil”, it added.

The companies plan to produce dimethyl ether (DME), ammonium nitrate and synthetic natural gas through these projects, the ministry said.

Details on exact location, cost and capacities of the proposed projects were not disclosed in the recent announcement.

In 2020, the government had estimated that it would require an investment of more than Indian rupee (Rs) 4tr ($40bn) to gasify 100m tonnes/year of coal by 2030.

The coal gasification project will happen in three phases, according to the Ministry of Coal’s National Coal Gasification Mission report released in September 2021, which specified timelines for start and completion of each phase.

In the first phase of the project which covers 2020-2024, a total of 4m tonnes/year of coal will be gasified and will involve an investment of around Rs200bn.

This phase included building a 1.27m tonne/year urea plant based on coal gasification technology and will be operated by Talcher Fertilizer Ltd. The plant is expected to become operational in the fiscal year ending March 2025.

CIL is also setting up a 676,000 tonne/year methanol plant at the Dankuni Coal Complex (DCC), in West Bengal state as part of the first phase.

Once operational, the plant is expected to help India achieve its aim of providing 15% methanol-blended fuel thereby reducing crude imports by 2030.

The planned four coal-to-chemicals projects, for which pre-feasibility studies have been completed, represent the second phase of India’s national coal gasification project, CIL stated in its 2021-22 annual report.

The second phase (2020-2024) will involve gasification of 6m tonnes/year of coal which is expected to require an investment of Rs300bn

These plants will be located near the mine heads of Eastern Coalfields Ltd (ECL), South Eastern Coalfields Ltd (SECL) and Western Coalfields Ltd (WCL), CIL and the coal ministry noted

“After successfully setting up technology in Phase II, more projects shall be identified,” according to the ministry document, noting that the third phase (2022-2030), 90m tonnes of coal will be gasified and will require an investment of Rs3.6tr, it added.

Source: ICIS by Priya Jestin,

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