Companies

Coal India picks PDIL as successful bidder to set up methanol plant in West Bengal

Shobha Roy Kolkata | Updated on April 11, 2019 Published on April 11, 2019

Lowest bidder MN Dastur challenges decision

Projects and Development India Ltd (PDIL) is believed to have emerged as the successful bidder to provide engineering services for the setting up of a coal-based methanol plant in West Bengal by Coal India Ltd (CIL).

Even while two engineering consultancies — MN Dastur & Co and PDIL — were vying for the coveted project and MN Dastur emerged as the lowest bidder (L1), PDIL emerged as the successful bidder, an industry source told BusinessLine.

The former was disqualified on ‘technical grounds’, and has challenged it before the Independent External Monitor (IEM). A senior CIL official said: “We had several rounds of meetings and another one with IEM is on for taking up their grievances. The IEM is examining it. I would not like to comment any further.”

MN Dastur is, however, hopeful CIL will issue a letter of intent (LoI) to it soon. “We have emerged as L1; now it is in CIL’s hands. I hope they will issue the LoI soon,” said Abhijit Sarkar, Vice-President, MN Dastur.

Once the LoI is issued, the chosen firm will be required to carry out a detailed report which involves initial investigation, technology selection and examining the feasibility of the entire project. It could take over a year for the detailed feasibility report to be prepared.

With an aim to boost clean energy initiatives, CIL has been looking to set up a coal-based methanol plant at the Dankuni Coal Complex (DCC) of South Eastern Coalfields Ltd (SECL), a subsidiary. It aims to produce 6.76 lakh tonnes of methanol per annum. The cost of the project is pegged at ₹4,500 crore.

Norms eased

The Centre recently eased the norms pertaining to extraction of natural gas and coal bed methane (CBM) from coal seams for the state-owned miner so as to facilitate methanol production. So CIL, which earlier had to apply for licence with the Petroleum and Natural Gas Ministry to extract CBM from its coal seams, is now not required to do so.

The foray into methanol production will help CIL diversify from coal into the chemicals business by converting the high calorific value, low ash thermal coal into chemicals.

Increasing the share of methanol in energy consumption is expected to help boost the country’s economy without increasing the carbon footprint.

“Methanol can be used for partial substitution of petroleum. Import of petroleum is one of the biggest expenses of our country. As per our estimates, the country can substitute $15-20 billion of petroleum imports if we can actually develop this coal-to-methanol and scale it up,” Sarkar said.

Published on April 11, 2019
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