Shell has answers for GAILآ’s coal gasification plan

Vol 9, PW 16 (17 Nov 05) Midstream & Downstream

GAIL wants to revive an old MoU it has with Shell to develop its coal gasification ambitions.

First though, it is waiting for a feasibility report from consultant Uhde of Germany on the conversion of coal to gas. Uhdes study is expected end-December.

Hungry to diversify, GAIL sees potential in coal gasification but is heavily dependent on technology from Shell, which operates a pilot project in Holland, generating 230-MW electricity. Not interested in electricity, GAIL only wants to produce gas for sale to fertiliser plants.

Its model for this is a Shell venture in China using 2000 tonnes of coal per day to produce 3m cm/d. West Bengal, Orissa and Jharkhand, with their abundant coal reserves, are ideal locations for a similar project but GAIL has no coal mining leases of its own.

Over the past two years, all attempts to sign a MoU with Coal India have failed. Unless theres an agreement with Coal India for supply of coal for 20 years, we learn, this project cannot take off.

Coal India fears a MoU will compel it to commit money to the project. They have not responded to GAILs letters and meetings.

GAIL believes Coal Indias mining data and information on trapped gas within coalmines could prove invaluable to the project. But despite best efforts, Coal India is unwilling to share its data with GAIL.

India has 20bn tonnes coal reserves. Most of it is poor quality, with nearly 30% ash content.

Best grade coal is reserved for steel factories and the three next best grades go to power stations. GAIL will have to be satisfied with the E grade, we learn.

Given the inferior quality of Indian coal, theyll have to use about 3000 tonnes per day to produce 3m cm/d gas. Once the Uhde feasibility report arrives, GAIL hopes to revive its MoU with Shell to take the project forward.