NLC India, the public sector mining and power generation company, is putting up a ₹4,350 crore lignite-to-methanol plant. When the plant starts methanol production, it will save ₹1,000 crore worth of crude imports annually, NLC India’s Chairman and Managing Director, M Prasanna Kumar, told businessline today. 

The plant will produce 400,000 tonnes of methanol using 2.5 million tonnes of lignite.  

NLC has been assured that it would get ₹600 crore viability gap funding from the government, but Kumar expects the funding to go up further, given that certain conditions for the additional funding have been met.  

Air Products of USA is the technology partner for the project. Government of India-owned Engineers India Ltd is the project manager.  

In coal-to-methanol or lignite-to-methanol plants, coal or lignite is first gasified into synthesis gas (syn gas) by mixing pulverized coal or lignite with an oxidant such as oxygen or steam. The syn gas — which is very hot (about 1,800 degrees Celsius) — is a mixture of carbon monoxide and hydrogen and is a building block for producing a range of chemicals, including methanol.   

As such, the process is divided into two parts – lignite to syn gas and syn gas to methanol. NLC has floated two separate tenders for awarding the projects.  

The technical bids have been opened for the lignite to syn gas package; three parties have submitted bids. Kumar is hopeful of being able to award the project by the end of January 2024. 

For the syn gas to methanol project, the last date to submit bids is December 30.  

Kumar expects work on the project to commence by March. 

The government of India plans aims at the country having 100 million tonnes of coal or lignite gasification plants by 2030. Currently, five projects are underway—the Talcher project, which is a joint venture of Coal India, RCF, GAIL and FCIL) and the projects of Eastern Coalfields, Western Coalfields, Mahanandi Coalfields—and NLC. 

North Dhadu coal block 

Meanwhile, NLC, which had won the North Dhadu coal block in Jharkhand through a commercial auction in August, received the formal ‘allotment order’ last week, Kumar said. 

NLC planned to produce 3 mtpa of coal from the block, but now it feels that production could go up to 4 – 5 mtpa.