NITI Aayog sees methanol as a more viable alternative fuel

Richa Mishra/ Twesh Mishra

Methanol may become a sought-after alternative fuel if NITI Aayog has its way. The think-tank, which is helping the Ministry for Petroleum and Natural Gas draft a Cabinet note on methanol, feels it is also a cheaper fuel.

NITI Aayog Member, VK Saraswat, told BusinessLine : “We have made a presentation to the Prime Minister’s Office on the proposed use of methanol and the progress made so far. The intent is that when a Cabinet note is circulated it covers all aspects and issues that may pose a challenge for Methanol Policy implementation.”

The policy will be a combined effort of the Ministry of Petroleum and Natural Gas, Fertiliser and Coal among others, while NITI Aayog will be a facilitator. Before the Cabinet considers the proposal, it is important to identify the sources of the fuel.

“We are also looking at possible international collaborations that would help during the interim period till coal to methanol production in India reaches a level that it can meet the demand. We need to import certain quantity of methanol till then. So, before we firm up the policy we are identifying the countries with whom we can have possible tie-ups.”

Various options on table

Besides, these should be long-term relationships and not on a one-time basis, he said. A thought has also been given to the proposal that instead of transporting gas and then producing methanol, why not have assets which can produce methanol and then import it here, Saraswat said adding that getting methanol is cheaper than bringing LNG.

On the possible joint ventures, he said: “One could go for a joint venture plan in a country where the gas is available, set up a plant there on a joint venture basis with a forward contracting as your equity, making it much more viable.”

A project for the purpose could be through the International Coal Ventures Ltd (ICVL), a joint venture of five PSUs, in Mozambique. At present, except for extracting some coking coal, not much is being done there, he said adding: “They have a huge reserve of what is called middle quality coal available, we are thinking of setting up a plant there also. A project report is being made only for manufacturing methanol using that coal and bringing methanol here.”

Saraswat said he would rather have all the questions answered before the Cabinet note is put in place. “There is no point in doing kite flying particularly for international tie-ups. We should have something substantial with country A, B and C. Once we are able to zero in on that and we have some substantial data to put in the Cabinet note,” he added. Locally, Saraswat also met the AP Chief Minister for allowing use of coal for methanol. “The CM has asked me to prepare a project report. Basically it is a question of technology. We are looking at good technology…ultimately it depends on the calorific value and ash content of coal and depending upon the calorific value we can select a particular technology,” he added.

On whether there could be a possible competition between methanol, coal, and gas as commodities, he said: “There is no competition because for manufacturing methanol you can either use coal or gas. If gas was available in abundance why should I look overseas even for using it for methanol.” “Today, some of the fertiliser units are using gas as base fuel because they are getting it at subsidised rates. If they were not getting the subsidy, even that would not be possible.”

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