Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL) have forged a joint venture agreement (JVA) to establish India’s inaugural commercial-scale ammonium nitrate plant using surface coal gasification (SCG) technology. This development, announced on 28 February 2024, closely follows the government’s sanction of the Viability Gap Funding (VGF) scheme for coal gasification.
Plant may start operations in CY’28-29
The project, slated to commence operations in 2028-29, will be situated in the Lakhanpur region of Mahanadi Coalfields Limited (MCL), Odisha. Initially projected to yield 2,000 t of ammonium nitrate per day, the plant aims for an annual output of 6.60 lakh tonnes, necessitating 1.3 mnt of coal annually, to be supplied by CIL.
Government to provide subsidized coal for coal gasification
Coal India and SCCL pledge to offer coal for gasification projects at subsidized rates, mirroring the pricing for the power sector. This commitment extends to long-term coal linkages spanning 10, 15, or 20 years, ensuring consistent supply. Unlike other industries where coal is priced at a premium, gasification ventures will benefit from subsidized coal rates, promoting wider adoption of coal gasification across various sectors.
CIL to explore alternative coal uses after meeting power sector demand
PDIL has been entrusted with preparing a detailed feasibility report for the coal gasification plant, with land acquisition anticipated to conclude by September 2024 paving the way for subsequent construction activities.
Coal India doesn’t just want to make electricity; they want to find new ways to use coal that are better for the environment. They believe using a special technology called SCG can turn coal into a useful gas that can replace natural gas and help make other chemicals. This will reduce the need to buy chemicals from other countries.
With help from the government’s funding programme, this project led by Coal India and BHEL is expected to make the technology better and encourage other companies to engage in similar projects.