ONGC, CIL join hands for coal gasification

Oil and Natural Gas Corporation Ltd (ONGC) and Coal India Ltd (CIL) have joined hands for coal gasification. ONGC is the country's largest producer of natural gas, while CIL is the country's largest coal producer with plans to acquire mines abroad.

The two companies will set up underground coal gasification stations by 2009. Each station requires an estimated investment of $15.32 million (Rs 75 crore). The power plant will require an additional investment of Rs 600 crore.

"Fifteen cities in West Bengal, Jharkhand, Maharashtra, Gujarat, Andhra Pradesh and Tamil Nadu have been identified for the pilot project and a detailed feasibility report will be prepared by 2006-end for launching a commercial project," said ONGC Chairman and Managing Director Subir Raha, after he and CIL Chairman and Managing Director Shashi Kumar signed a memorandum of understanding.

Kumar said underground coal gasification would help convert unminable reserves into commercially usable fuel. The 50:50 collaboration will use technology from Russia's Skochinksy Institute of Mining to convert underground coal into methane gas that can be used as fuel in industries.

The CIL chairman also said the company would scout for coal in South Africa, Australia, Indonesia, Zimbabwe and Mozambique through a proposed subsidiary.

CIL has also submitted a proposal to the government for forming Coal Videsh Ltd. Kumar declined to comment on the company's investment for its overseas venture aimed at reducing the country's import of high-grade-ash content coal.