State-owned Coal India Ltd (CIL) has invited global bids for setting up a coal to methanol plant. Dankuni Coal Complex (DCC) in West Bengal, currently run by its subsidiary South Eastern Coalfields Ltd, is identified as the project site for the proposed plant.
Bengal will have the second coal-to-methanol plant at Sonapur near Asansol. The others will be set up in Chhattisgarh, Maharashtra and Jharkhand. Eastern Coalfields will supply coal for the Asansol project, South Eastern Coalfields the Chhattisgarh plant and Central Coalfields the Jharkhand plant. These projects will consume almost 7.5 million tonne per annum of coal as per CIL.
"Coal India Limited (CIL) has floated an open global tender inviting bids for setting up a, first of its kind in India, coal to methanol (C2M) plant through surface coal gasification route on Build-Own-Operate (BOO) model," the PSU said in a statement.
Based on the outcome of pre-feasibility studies, CIL has floated this tender to select the BOO operator for the life span of the plant which is expected to be 25 years.
"This is a part of implementing the methanol economy programme of the government aimed at reducing the country's oil import bill," a senior executive of the company said.
The capital outlay of the entire plant is pegged at around Rs. 6,000 crore though the cost would not be borne out of CIL's coffers. BOO operators would own and lease the plant, apart from designing, building, maintaining, producing and storing the product.
However, CIL shall allocate the land, power, water to the operator for the proposed plant for which the land is already available.
Approximately 6.76 lakh tonnes of methanol per annum is targeted to be produced from the plant to be used for blending with petrol up to 15 per cent. At this capacity the plant will cater to the methanol requirement of four eastern states of the country - West Bengal, Odisha, Jharkhand and Bihar.
The company is in dialogue with IOCL and other government owned oil companies for a long term tie-up for assured marketing of methanol. CIL would also supply low-ash high calorific coal of Ranigunj coalfields, having an ash content of around 24 per cent, as basic raw material for the production of 2,050 metric tonnes of methanol per day. The PSU would meet around 1.5 million tonnes of coal requirement annually.
CIL has aligned itself with the national objective of reducing dependence on imported crude and the plan to set up the plant is a step in that direction.
Government think-tank Niti Ayog has been pushing for developing a methanol economy as one of the options to reduce India’s carbon footprint in line with the Paris climate commitment and dependence on oil imports. But for Coal India, finding cleaner use for coal may become imperative for survival as thermal power plants, the main consumers, lose ground to to renewable projects. The share of renewables, including large hydel projects, in the country’s installed generation capacity has risen to 36.2% as of March 2020.
While coal to liquid is the latest technology being deployed, the bid the bid to find cleaner use for coal was launched with a Rs.13,000-crore coal-to-gas, or coal gasification, project in in Angul district of Odisha. The gas produced from coal will be used for making urea at the Talcher fertilizer plant in the district.
Project Developments India Limited (PDIL) the government owned consultancy and engineering CPSE has been retained as the consultant for the selection of the BOO operator.
Prospective bidder should be an established BOO operator having successfully built plants on BOO basis in coal to liquid, coal gasification, coal to chemical, fertilizer and methanol and the like.
While the mechanical setup of the plant is expected to be completed in 36 months, the actual commissioning of the plant is envisaged to be in 41 months. The last date for the submission of bids is December 17, 2020.
