Ambarish Mukherjee

New Delhi, July 30

WITH international crude oil prices touching $60 per barrel, the Government has pulled out an old report on converting coal into synthetic oil. The report was submitted to the Coal Ministry after an official delegation's visit to Sasol Mining Company in South Africa, which converts coal into crude oil.

"The Minister of State for Coal, Mr Dasari Narayan Rao, has directed the department to immediately conduct a feasibility study on introduction of the concept and technology for converting coal into synthetic oil in the country in the context of prevalent high oil prices and the recent interest shown by the private sector in this technology," Ministry officials told Business Line.

The Coal Ministry had sent an eight-member expert team to Sasol in 2000. The team, in its report submitted in early 2001, recommended setting up of a task force of experts to look into the feasibility of converting coal into oil and also to initiate a dialogue with Sasol for technical help. The task force was never formed.

Around the same time, Coal India Ltd (CIL) was also asked to float a global tender seeking Expressions of Interest for such technological conversion. Apart from Sasol, only Petronet of Malaysia has this technology though it does not have an operational plant as of now.

However, there was no response to the CIL tender and eventually it was put on the back burner.

Mr M.K. Thapar, the then Advisor (Projects) in the Ministry of Coal and currently the Chairman and Managing Director of South Eastern Coal Fields Ltd (SECL) who was a member of the official team, told Business Line that, "The Sasol technology is three-phased. First, solid coal is converted into a gaseous form and then combined with hydrogen. After this, it is liquefied to get what is called synthetic oil, which is then refined. The final product is synthetic petrol and its fuelling capacity is as good as natural oil."

High ash containing coal, which is also abundantly available in India, is converted into synthetic oil by Sasol. According to estimates submitted by the expert team, at the Sasol facility one tonne of coal gets converted into 230 litres of by-products. Out of this, 160 litres are crude oil, which is then sent to the refinery, and the remaining 70 litres contain tar, pitch and other rare chemicals.

Ministry sources told Business Line that the Government did initiate a dialogue with Sasol at that time but the South African company was not ready to part with the technology. It was ready to help only up to gasification but not the second stage of converting the gas into crude oil, which is why things did not make much headway.

"Now it seems a number of private parties are interested in this technology and as per reports these private companies are interested only up to the gasification process," Ministry officials added.

(This article was published in the Business Line print edition dated July 31, 2005)
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