The Hindu Business Line : Panel to study coal-to-liquid fuel projects

The Prime Minister, Dr Manmohan Singh, has decided to set up an Inter-Ministerial Group (IMG) within the Planning Commission to examine the possibility of conversion of coal to liquid fuel and recommend a time-bound action plan.

The decision follows a presentation by the Investment Commission suggesting that conversion of coal to liquid fuel and gas is feasible in India, and should become an integral part of the country's strategy for oil security, according to an official release.

The Investment Commission Chairman, Mr Ratan Tata, and other members met the Prime Minister on Friday and made a presentation on the establishment of a coal to liquid industry in the country. The Deputy Chairman of the Planning Commission and the Finance Minister were also present at the meeting.

Oil needs

The commission said the country is expected to import over 90 per cent of its oil needs in the future and new domestic discoveries of oil and gas are not expected to substantially reduce oil imports.

According to the commission, four to five coal to liquid projects can double domestic proven oil reserves and the proposed project will add 20 per cent to India's domestic proven oil reserves. The liquid fuel to be produced would be predominantly diesel but will also include naphtha and LPG.

On the other hand, India's low-grade coal would not be a limitation as the fuel output would be ultra clean.

The project, according to the commission, would need 1.3 billion tonnes of coal as captive mine to the project with open cast mining of pit-head coal and will require CTL to be notified as end use for captive mining. For this, a mechanism for Centre-State partnership will need to be put in place, the commission added.