The Hindu Business Line : Reliance plans underground coal gasification projects

RIL has urged the Government to change the Coal Mines (Nationalisation) Act of 1973, to create new provisions for allocation of captive coal blocks to a private sector entity

New Delhi , Dec 6

RELIANCE Industries Ltd (RIL) plans projects for gasification of underground coal. The Mukesh Ambani controlled entity proposes to sell this gas to fertiliser, chemicals and petrochemicals companies as well as power producers, and is ready to invest a large amount of risk capital, sources told Business Line.

The company also proposes to sell the gas to far-off customers after converting it into pipeline-quality gas. The company has even sought necessary changes in existing lawsfor undertaking such projects.

Till date no gasification project has been undertaken in India. ONGC and Coal India Ltd (CIL) recently signed an MoU for a Rs 100-crore pilot project for coal gasification on a 50:50 basis. ONGC is sourcing technical expertise from Russia's Skochinsky Institute of Mining. A Skochinsky team is visiting India in the middle of the month to recommend a site for the project. The ONGC-CIL proposal has been cleared under the `Government Company Dispensation Rule.'

RIL has urged the Government to change the Coal Mines (Nationalisation) Act of 1973, to create new provisions for allocation of captive coal blocks to a private sector entity like Reliance.

The company suggests that a technical change in the Act could permit the company to sell the converted gas to third party customers.

For this the law must be amended whereby gasification of underground coal, that is conversion of one fuel form into another, would be recognised as a permissible end-use for the allotment of captive blocks. Currently the Act provides for allotment of captive coal blocks only to power, iron and steel, coal washeries and the cement sector for mining and use of the coal directly as fuel in the respective production process.

The company has not indicated any proposed investment amount but is prepared to invest large amount of risk capital for undertaking a pilot project, sources said.

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