State-owned Coal India firms up gasification plans in tie-up with BHEL

Coal India has formalised its coal gasification/coal-to-chemical plans, marking its foray in a segment, which has been the topic of inter-ministerial tussle for decades.

CIL has partnered Bhel to set up Bharat Coal Gasification and Chemicals (BCGCL), which aims to produce close to 660,000 tonnes of ammonium nitrate from CIL’s coal mines.

According to officials, the total project cost is estimated to be around Rs 11,782 crore, with Rs 1,350 crore allocated for the preparation of a detailed feasibility report (DFR).

In May 2024, CIL and Bhel joined hands to set up BCGCL as a joint venture. CIL holds 51 per cent stake while Bhel has 49 per cent.

 

PM Prasad, chairman and managing director, CIL, in an interaction with this paper recently, said the objective of the joint venture (JV) is to engage in coal gasification to produce syn-gas, ammonia and nitric acid as intermediate products and ammonium nitrate (AN) as end product. These can be utilised in the CIL mining and production chain. Other products would be sold in the open market.

“AN is a major ingredient in manufacturing bulk explosives, which CIL uses in large quantities in its OC mining operations. The plant will come up in the Lakhanpur area of Mahanadi Coalfields (MCL), Odisha, and produce 2,000 tonnes of AN per day with annual production pegged at 660,000 tonnes. The requirement of around 1.3 million tonnes of coal will be supplied by CIL from MCL,” Prasad said.

Vasundhara coal mine of MCL is one of the identified mines for the project, said officials.

Around 350-acre land in the Lakhanpur area under the MCL zone in Jharsuguda district has been earmarked for the project, said an official.

The project will span across four stages, with Bhel receiving the tender for coal gasification, air separation unit (ASU), ash handling plant (AHP), steam generation plant (SGP), coal handling plant (CHP), and cooling towers on a nomination basis, said officials.

In addition, BCGCL has also floated a second tender for the ‘coal to ammonium nitrate’ project, which will be executed on a lump sum turnkey (LSTK)-basis.

Further stages of the project will be executed through additional tenders.

LSTK-2 and LSTK-3 packages will cover the purification of raw gas, production of carbon monoxide, synthesis of ammonia, and storage of liquid nitrogen. The LSTK-4 package will focus on the production of nitric acid and ammonium nitrate.

Prasad said CIL has another joint venture with Gail for setting up a coal-to-SNG project at Sonepur Bazari area of Eastern Coalfields (ECL) in Burdwan district of West Bengal.

“A detailed feasibility report is in progress for it. We are also exploring a venture with SAIL, which is still at a nascent stage,” said Prasad.