Estimated cost of the project would be about Rs 2,430 cr

Our Bureau

Kolkata, Aug. 29

Gas Authority of India Ltd (GAIL) intends to set up a coal gasification plant in the eastern part of the country to produce synthesis gas, which in turn, will be used in production of chemicals such as ammonia or methanol.

GAIL has entered into a confidentiality agreement with Coal India Ltd (CIL) to explore, evaluate, and if possible, develop the commercial application of surface coal gasification technology.

GAIL, recently, presented a detailed feasibility report on surface coal gasification to CIL highlighting that the project be located at Talcher coalfields in Orissa.

The estimated cost of the project would be about Rs 2,430 crore.

CBM exploration

Meanwhile, CIL submitted, jointly with ONGC, a bid for coal block in Birbhum district in West Bengal covering 248 km area for exploration and production of coal bed methane (CBM) an environment-friendly clean fuel with properties similar to natural gas.

The bid was submitted to the office of Directorate General of Hydrocarbons (DGH).

The participative interest for CIL would be 35 per cent, whereas for ONGC and Indian Oil Corporation will have stakes of 45 per cent and 25 per cent, respectively. The bid is expected to be evaluated in about two months.

It may be mentioned that a total of 16 blocks have already been awarded. DGH has allotted two CBM blocks on nomination basis to the consortium of CIL and ONGC.

The exploration activities have established encouraging CBM resources in these blocks.

(This article was published in the Business Line print edition dated August 30, 2006)
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