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In demand: A file photo of a sugarcane farm

Rahul Wadke

Mumbai, Oct. 29 Ispat Energy Ltd, a subsidiary of Ispat Industries Ltd, has plans to invest about Rs 1,000 crore in the current fiscal for producing bio-CNG from pressmud, a byproduct of sugarcane processing.

Biogas is extracted from pressmud, and it is further chemically treated to produce bio-CNG.

The gas produced can be used as a fuel for transportation and industrial applications.

Mr Shishir Tamotia, CEO, Ispat Energy, told Business Line that the company intends to work with 20 sugar mills in Maharashtra and Uttar Pradesh for producing bio-CNG. It has decided to invest Rs 35 crore in a bio-CNG facility for Warna Sugar Ltd, Maharashtra, he said.

Mr Tamotia declined to share the details of the fund raising plan.

Ispat Energy has signed a BOOT (build-own-operate-transfer) agreement with Warna for setting up the 11,000 cubic metres a day bio-CNG plant, which will be online by October 2009.

The plant is expected to utilise 110 tonnes of pressmud and 100 tonnes of wet and dry organic manure a day to produce the gas. The complete project can generate 16,000 to 30,000 carbon credits a year.

CantorCO2e, which is of the leading provider of financial services to the global environmental and energy markets, would be developing the clean development mechanism documentation, which is required for selling the carbon credits for 10 years.

Mr Tamotia said that bio-CNG would be produced at about Rs 26 a kg and would be sold to Warna at Rs 28 a kg. The sugar mill would use it as a piped natural gas for its residential colony and also selling it commercially in 19 kg cylinders, he said.

Mr Tamotia said the company planned to invest Rs 5,000 crore in the next five years for distribution of natural gas. It would produce its own natural gas from organic sources and not from hydrocarbon sources.

It has identified tier-II and III cities such as Kolhapur and Sangali close to the sugar belt of Maharashtra for city gas distribution, he said.

More Stories on : Non-conventional Energy | New Projects | Sugar

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