Financial Daily from THE HINDU group of publications
Sunday, Dec 18, 2005
Alliances & Joint Ventures
Industry & Economy - Petroleum
Coal gasification projects ONGC may rope in Shell as joint venture partner
Pratim Ranjan Bose
Kolkata , Dec. 17
Oil and Natural Gas Corporation Ltd may rope in Royal Dutch Shell as a 50:50 joint venture partner for taking up surface coal gasification projects.
The companies will enter into a memorandum of agreement on January 17.
ONGC has proposed a 50:50 joint venture with Coal India Ltd to invest Rs 150 crore in underground (in-situ) coal gasification (UCG) projects with technological support from Stochinsky Institute of Russia.
It has also entered into an MoU with Neyveli Lignite Corporation for taking up UCG projects.
ONGC sources told Business Line on Saturday that the company was trying to get Shell as a joint venture partner to prevent the possibilities of use of the coveted Shell technology by any other company in India.
Earlier, GAIL (India) Ltd had also expressed an intention to use Shell technology in its proposed surface coal gasification projects.
"Following firming up of our relationship with Shell, we plan to take up a few pilot projects. The first pilot project is expected to be commissioned in 2006. We have already entrusted an agency with the job of carrying out the framework of a feasibility study following the guidelines prepared by Shell," a senior ONGC official said.
The location of the pilot project is yet to be decided.
When asked, the ONGC Chairman, Mr Subir Raha, said, "We are negotiating with a few MNCs including Shell for technology support in surface coal gasification. We are expecting to enter into an agreement with a suitable partner by next month."
Gujarat likely to be preferred location
THE much-expected UCG pilot project of ONGC is likely to come up in the West coast, preferably in Gujarat, where the oil major has on-shore production rigs.
A final view on the issue, however, would be taken following a meeting with Stochinsky Institute during this month. ONGC produces over six million tonnes of oil in Gujarat.
A senior company official told Business Line that two major outputs of UCG were carbon-di-oxide (Co2) and methane.
"Since we have our oil production rigs, Co2 would be pumped into the reservoir, while methane would be used for power generation."
Sources, however, added that the company has, so far, identified four to five locations in the country for setting up such pilot projects.
"We have already carried out surveys at the identified locations. Stochinsky Institute is taking a final view on it."
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