Bharat Coal Gasification & Chemicals Limited (BCGCL), a joint venture company of CIL and BHEL has floated a tender document for selection of LSTK-2 contractor for ‘Coal to Ammonium Nitrate’ Project at Odisha on Thursday.

The LSTK-2 tender deals with Syngas Purification Plant and ammonia Synthesis gas plant that will purify the raw syngas produced from the coal gasifier and make it suitable for ammonia synthesis.

The date for pre-bid has been scheduled on 28.06.2024 and interested bidders can share their queries by 21.06.2024.

CIL and BHEL have entered into an agreement for setting up India’s first commercial-scale coal to ammonium nitrate plant through surface coal gasification (SCG) technology route. As per the agreement, the gasification plant will be based on locally developed coal gasification technology by BHEL, which utilised the high ash coal from Lakhanpur Area to produce 0.66 million metric tons per annum (MMTPA) of technical grade ammonium nitrate. The entire project cost, according to PFR, is Rs. 11,782 crores. For the task of "Preparation of Detailed Feasibility Report (DFR)," PDIL has been designated as PMC for the Project.

Accordingly, Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL) have incorporated a joint venture company, Bharat Coal Gasification & Chemicals Limited (BCGCL) on May 21,2024, which marks the foray of these two PSUs into coal-to-chemical business. It is a subsidiary of Coal India Limited (CIL) in which CIL holds 51% and BHEL holds 49% equity.

The Packaging Philosophy for the execution of the project has been finalised as partial LSTK mode wherein four LSTK packages and 29 other offsites & utilities packages that will be done on EPC mode have been identified. Out of four LSTK packages, three packages namely LSTK-2, LSTK-3 and LSTK-4 will be executed through tendering route and remaining LSTK-1 will be done by BHEL on nomination basis.

The project has been envisaged in such a manner that no stone is left untouched, a land of around 350 acre is readily available with the CIL and off-take of final product Ammonium Nitrate will be taken by CIL and will be used in explosive activity for mining of coal. This will be the first commercial Coal gasification plant that showcase the indigenous coal gasification technology developed by BHEL. The Ministry of Coal launched financial support/incentive/grant (the “Financial Incentive”) to promote coal/lignite gasification projects of government PSUs and the private sector. The Financial Incentive is divided into three categories. The project is expected to be the first to qualify for the benefit of ₹ 1350 crores under Category-1.

Additionally, tenders for LSTK- 3 and LSTK-4 have also been prepared and are under approval at CIL and it is expected that tenders for LSTK-3 and LSTK-4 will be floated as soon as possible.