GAIL poised for coal gasification leap with RCF

Vol 19, PW 4 (22 Oct 15) Midstream & Downstream

GAIL is expected to form a Joint Venture within the next one and a half months with three other state-owned companies to set up a Rs7500cr ($1.25bn) coal gasification project at Talcher in Orissa.

This represents a new thrust for the gas transmission company, which wants experience in coal gasification to eventually set up its own project. At Talcher, GAIL is likely to partner Rashtriya Chemicals & Fertilisers (RCF), Coal India, and Fertiliser Corporation of India (FCI).

Of the total project cost, about Rs2500cr ($416m) will be equity contributed by the partners and the rest will be loans. While RCF and Coal India will have majority stakes as they are leading the project, GAIL is expected to take 11-30% and FCI will have a minor stake as it owns the land on which the venture is proposed.

After the JV is set up, EPC tenders will be issued. Once contracts are awarded, the project should be completed within three years.

When ready, the facility will use 5m t/y of ‘high ash content coal’ which has a lower calorific value than normal coal and is therefore less useful as a fuel. The facility will produce 3850 tonnes/day of urea after converting coal to ‘synthetic gas’ then to ammonia.

Originally the partners planned to also produce 1m cm/d of natural gas which GAIL aimed to sell but it seems RCF insisted the project produce urea.

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