ONGC moots coal gassification JV with GSPCL

Oil and Natural Gas Corporation (ONGC) has put forward a proposal to the state government for setting up a joint venture with the state-owned Gujarat State Petroleum Corporation Ltd (GSPCL) for a coal gassification project in the state.

It has been reliably learnt that the chief minister Narendra Modi, who held talks with the chairman and managing director of ONGC Subir Raha in the state capital Gandhinagar, has agreed in principle to the proposal.

A special purpose vehicle (SPV) will be created with the participation of GSPCL and ONGC soon for the project.

"During the meeting, Raha put forward the proposal for launching the project in north Gujarat. The proposal was primarily okayed by the government. The modalities will be worked out by the ONGC. The project is likely to attract a Rs 5,000 crore investment over the next four years only by ONGC, apart from investment by the government through GSPCL," a senior government official said.

The official said the basic outline of the project, which will be concentrated on the area between Tharad and Patan in north Gujarat, close to the Indo-Pak border, has been handed over to the government by ONGC.

Raha could not be contacted for comments. P K Mishra, principal secretary to the chief minister, confirmed that such a proposal was put forward by ONGC on Thursday.

"There is a huge coal reserve in the stretch between Tharad in Banaskantha district and Patan town in Patan district of Gujarat. ONGC has come up with the idea of taking out the coal reserve by gassification in association with GSPCL. This is a cost effective method to use the reserve," he said.

Mishra said a pilot project will be shortly initiated with an investment of Rs 500 crore. After this, about Rs 5,000 crore of fresh investment from ONGC is expected in the project.

On the stakes of the companies in the proposed SPV, Manjula Subramanium, principal secretary (energy and petrochemicals), said, "Those modalities are yet to be worked out. We will decide these issues once we receive more details of the project from ONGC."

ONGC has an investment of Rs 50,000 crore in Gujarat, the highest for any state.