Financial Daily from THE HINDU group of publications
Friday, Dec 03, 2004
Industry & Economy
ONGC, CIL tie-up for coal gasification projects hits a snag
Kolkata , Dec. 2
ONGC Ltd's ambitious move to take up coal gasification projects jointly with Coal India Ltd (CIL) has suffered a setback as the latter's board has expressed reservations in undertaking such ventures as per terms specified by the OGNC in its draft proposal.
The proposal was submitted a few months ago to the Coal India Chairman for his consideration.
The draft proposal was placed before the CIL board at its recent meeting in New Delhi.
The board, in turn, decided not to join hands with ONGC for undertaking coal gasification projects on the basis of its proposal.
However, the board is believed to have asked ONGC to review its proposal, particularly regarding the equity holding pattern in the joint venture company.
ONGC has been actively considering exploitation of coal gas from virgin coal deposits by introducing "underground coal gasification" (UCG) technology. ONGC has identified NMRC-Skochinsky Institute of Mining, Russia, as consultant for the UGC application.
The UGC process is a new method for exploitation for coal deposits by "in-situ" coal conservation to a fuel. Under the process there is no need to develop a virgin coal mine. Coal is burnt inside the deposit to produce coal gas.
Subsequently, the same gas can be pumped out and sent through a pipeline to the gas consuming industries.
CIL was approached because it has many identified virgin coal blocks under its command, which may be developed during the Tenth and Eleventh Plans.
OGNC feels that it will be beneficial for it and CIL if some of the blocks are taken up for coal gasification purposes.
The ONGC has the option to approach the Union Ministry of Coal for virgin coal blocks, which can be used by it for setting up coal gasification projects.
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