Neyveli Lignite, ONGC in JV talks

Neyveli Lignite Corporation Ltd (NLCL) has entered into talks with Oil and Natural Gas Corporation Ltd (ONGC) for setting up its first joint venture lignite gassification plant that would be used to generate power.

"This is for the first time that a lignite gassification plant would be set up in India," said S Jayaraman, chairman and managing director, NLCL.

"The government has already cleared the proposal for lignite gassification a few days back and we have initiated talks with ONGC for going ahead with the lignite gassification project," explained Jayaraman.

"The idea is to initially set up a pilot plant which would be followed by another prototype 10 to 15 mw power plant. If every things runs okay, we will set up a joint venture company with ONGC that would undertake power generation through lignite gassification," the CMD explained.

"Both NLCL and ONGC will have to undertake some R&D for the purpose," he added. "If successful, a much larger plant could be envisaged for power generation," Jayaraman said.

Details such as shareholding pattern and size of the equity capital would be worked out at a later stage, once the pilot project starts running successfully.

In the next four years, the company plans to invest close to Rs 20,000 crore for capital expenditure. NLCL is looking at the possibility of enhancing its power generation capacity by 1,000 mw in Tamil Nadu and by another 1,000 mw in Rajasthan in phases of 250 mw each.

Meanwhile, NLCL has already undertaken capital expenditure of Rs 6,000 crore for various mine and power plant capacity expansion projects in Tamil Nadu and Rajasthan.