"PSU Consortium Seeks Partners for Coal Gasification Projects"

A consortium comprising public sector entities, led by Coal India Ltd and mandated by the central government to explore coal gasification as an alternative energy source, is considering various business models, including Engineering, Procurement, and Construction (EPC).

EPC, a contract-based project delivery model, is being eyed as a potential avenue for project execution. According to sources within Coal India, the consortium intends to initiate the process through a tendering system for EPC, although the specific details are still in the works.

After a period of dormancy, coal gasification is once again gaining traction as a viable resource. Initially focusing on surface coal gasification projects, the coal miner, alongside its partners, is leveraging existing mines identified by Coal India for this purpose. This approach eliminates the need for new block allocations and falls squarely under the purview of the Ministry of Coal, alleviating potential conflicts with the Ministry of Petroleum & Natural Gas.

During a recent engagement in Hyderabad, Coal Secretary Amrit Lal Meena underscored the government's commitment to coal/gasification projects, highlighting various schemes aimed at promoting them. Coal India Chairman PM Prasad echoed these sentiments, emphasizing the opportunities in coal gasification and inviting technologically capable partners to collaborate with CIL in building a cleaner future, aligning with the net-zero target set for 2070.

Last month, the Union Cabinet approved a scheme to promote coal/lignite gasification projects, allocating ₹8,500 crore as incentives across three categories.

Under Category I, ₹4,050 crore is earmarked for government PSUs, with support provided for up to three projects through lump-sum grants or 15% of the capital expenditure, whichever is lower. Category II, with ₹3,850 crore allocated, extends support to private sector entities and government PSUs, offering similar grants for each project, alongside one project being bid out via a tariff-based bidding process. Category III, with ₹600 crore set aside for demonstration projects, provides grants for indigenous technology projects or small-scale product-based gasification plants.

Additionally, the Union Cabinet approved equity investments by Coal India Ltd for setting up coal-to-SNG (Synthetic Natural Gas) projects in ECL command areas through a joint venture with GAIL, and for coal-to-ammonium nitrate projects in MCL command areas through a joint venture with BHEL.

HBL