Coal India to set up new Rs 5,800-cr coal gasification project in Bengal

The newly launched auction for commercial coal mining offers discounts to potential bidders for coal gasification projects.

State-run Coal India (CIL) is planning to set up a coal-gasification project with an estimated investment of Rs 5,800 crore in the Dankuni coal complex in West Bengal. The project, which is now in the planning stage, will convert 1.5 million tonne (MT) of the fuel into other products and reduce emissions. “Tenders for the project are likely to be floated in September itself, and it is expected to be complete by January, 2025” Binay Dayal, CIL’s director, technical said in a webinar on coal gasification organised by the Union coal ministry on Monday.

Prime Minister Narendra Modi had said that Rs 20,000 crore will be invested in coal gasification projects by 2030 for eco-friendly utilisation of the fuel, which is abundantly available in the country. With this technology, coal can be gasified to turn it into a clean syngas or synthesis gas—a mixture of hydrogen and carbon monoxide — which constitutes the basic building block of the chemical industry and converted into a wide range of downstream products.

Between 2022 and 2026, CIL is also planning to invest another Rs 25,000 crore to build six other coal gasification projects with cumulative capacity of 6 MT. CIL said that since imports from Gulf countries are likely to pose price challenges for products from these units, some support from the government will be required to make these projects feasible. Long-term contracts from oil and gas marketing companies for assured offtake of the products will be helpful, experts pointed.

Talcher Fertilizers—a joint venture between CIL, GAIL, Rashtriya Chemicals and Fertilizers Ltd and Fertilizer Corporation of India Ltd—is also currently building a 2.5 MT coal gasification unit with an estimated investment of Rs 13,277 crore. The project was expected to be complete by September, 2023, but the construction process has faced delays due to corionavirus disruptions. The turnkey tender for the construction of this project was awarded to China-based Wuhuan Engineering.

The newly launched auction for commercial coal mining offers discounts to potential bidders for coal gasification projects. Union coal minister Pralhad Joshi said on Monday that “if we receive sufficient encouragement from the industry, the incentives can be increased.” Currently Jindal Steel and Power uses coal gasification technology to produce steel in its Angul plant. US-based global industrial gases company Air Products is also eyeing $10 billion investment opportunity in Indian coal gasification projects.