The consortium of public sector companies including Coal India Ltd, who have been mandated by the union government to tap coal gasification as an energy source and will look at varied business models including EPC.

EPC (engineering, procurement and construction) is a contract-based project delivery model.  Sources in Coal India said, it will be done through a tendering process for EPC, the details of which are still being worked out.

After a lag, coal gasification as a resource is once again being spoken about and to begin with, the coal miner along with its partners is working on surface coal gasification projects. Surface coal gasification doesn’t require any new allocations of blocks and is being done in existing mines of Coal India, which have been identified for that. Besides it falls under the Ministry of Coal, thus ending any uncertainty on management of assets, ending any conflicts that may take place with the Ministry of Petroleum & Natural Gas.

Government schemes

Recently in Hyderabad, Coal Secretary Amrit Lal Meena, when talking to stakeholders about coal/gasification projects, highlighted the government’s schemes for the purpose. At the same platform, Coal India Chairman PM Prasad, spelled out the opportunities in coal gasification and called on interested players having the technological capacity to partner with CIL towards building a cleaner future and help achieve the net zero target by 2070.

Last month, the union Cabinet had approved a scheme for promotion of coal/lignite gasfication projects of government PSUs and private sector with an outlay of ₹8,500 crore as incentive for coal gasification projects under three categories.

In category I, ₹4,050 crore has been provisioned for government PSUs in which upto three projects will be supported by providing lump-sum grant of ₹1,350 crore or 15 per cent of capex, whichever is lower. In category II, ₹3,850 crore has been provisioned for private sector as well as government PSUs in which lump-sum grant of ₹1,000 crore or 15 per cent of capex, whichever is lower provided for each project. At least one project will be bid out on tariff-based bidding process and its criteria will be designed in consultation with Niti Aayog.

Finally, in category III, ₹600 crore has been provisioned for demonstration projects (indigenous technology) and/or small-scale product-based gasification plants under which lump-sum grant of ₹100 crore or 15 per cent of capex, whichever is lower, will be given to the selected entity, who will have a minimum capex of ₹100 crore and minimum production of 1,500 Nm3/hr Syn gas.

The union Cabinet had also approved proposal for equity investment by (i) CIL for setting up of coal-to-SNG (Synthetic Natural Gas) project at ECL command area through a JV of CIL and GAIL; and (ii) for setting up of coal-to-ammonium nitrate project at MCL command area through a JV of CIL and BHEL.