The Hindu Business Line : Coal India, OIL plan joint venture for liquefaction plant

THE State-owned Coal India Ltd (CIL) has initiated moves to produce oil from high sulphur coal available under the administrative control of North Eastern Coalfields (NEC) in Assam. The proposed coal liquefaction project is to be set up jointly with Oil India Ltd (OIL).

An initial study carried out by OIL on NEC coal suggests that coal liquefaction is a proposition worth pursuing. OIL has thus expressed its keenness to be CIL's partner in its venture to produce oil from NEC coal and is looking for about 3.5 million tonnes of coal per annum for this purpose against NEC's current annual production of less than one million tonnes.

It may be noted that in the past NEC had problems of marketing its produce due to inherent high sulphur content in its coal. The proposed joint venture is expected to help NEC in solving its marketing problem.

In fact, senior officials of CIL and OIL recently held a meeting to discuss future possibilities, wherein OIL indicated that a tentative cost of extraction of oil from this process is likely to be around $40 per barrel, which is undoubtedly attractive keeping in view the burgeoning crude oil price in the international market which is around $68 per barrel.

It has been decided to form a "Joint Task Force" of CIL and OIL, to formulate a road map for the promotion of two joint ventures, one for coal production and the other for setting up a commercially viable coal liquefaction plant.

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