"NLC's Methanol Plant Targets ₹1,000 Crore Annual Savings in Crude Oil Imports"

In a strategic move towards sustainable energy production, NLC India, a prominent public sector mining and power generation company, is venturing into the establishment of a state-of-the-art ₹4,350 crore lignite-to-methanol plant. The project, spearheaded by NLC India’s Chairman and Managing Director, M Prasanna Kumar, is poised to make significant contributions to both the energy sector and the economy.

Kumar revealed today that upon commencement of methanol production, the plant is projected to save ₹1,000 crore annually in crude oil imports. The plant's estimated production capacity is set at 400,000 tonnes of methanol, utilizing 2.5 million tonnes of lignite.

Assuring the project's financial viability, the government has pledged ₹600 crore in viability gap funding, a figure that Kumar anticipates could potentially increase to ₹1,000 crore, subject to certain conditions being met. Notably, Air Products of the USA serves as the technology partner for the project, with the Government of India-owned Engineers India Ltd overseeing project management.

The lignite-to-methanol process involves the gasification of lignite into synthesis gas (syn gas), a high-temperature mixture of carbon monoxide and hydrogen. This syn gas serves as a crucial building block for producing various chemicals, including methanol. The project is structured into two phases – lignite to syn gas and syn gas to methanol. NLC has initiated separate tenders for these distinct phases, with technical bids already opened for the lignite to syn gas package, attracting interest from three parties.

Kumar expressed optimism about finalizing the lignite to syn gas project by the end of January 2024. Meanwhile, the deadline for submitting bids for the syn gas to methanol project is December 30, with expectations for project commencement by March.

This ambitious initiative aligns with the Government of India's vision of achieving 100 million tonnes of coal or lignite gasification plants by 2030. Presently, five such projects are underway across the country, including the joint venture Talcher project and those by Eastern Coalfields, Western Coalfields, Mahanandi Coalfields, and the promising project by NLC India.

HBL