One bid for NLC gas-methanol
Neyveli Lignite (NLC) has received only one bid for its gas-to-methanol or LEPC-2 project in Tamil Nadu.
On May 31 (2024), Tecnimont was the sole bidder to produce 1200 t/d methanol at an estimated cost of Rs1500cr (214m) from gas obtained from lignite mined by the state-owned brown coal or lignite miner. Technip was expected to bid but stayed away.
Some say Technip asked for a bid deadline extension, but NLC refused. "NLC was hurrying the (LEPC-2) submission process, despite a lack of clarity on LEPC-1," says a source.
"More time was needed to put in a bid." Still unclear is how NLC will proceed with LEPC-2 considering it has received only one bid.
A source argues that NLC should have extended the LEPC-2 bid deadline because it has yet to announce how it will proceed with the lignite gasification tender or LEPC-1. NLC scrapped LEPC-1 on April 1 (2024) because the sole valid bidder L&T’s price bid of about Rs3000cr ($375m), was 236% higher than the project estimate.
NLC opened L&T’s price bid on January 5 (2024). Initially, market rumours claimed NLC would likely ask project consultant Engineers India to execute LEPC-1.
"NLC is completely silent now about LEPC-1," we hear. "Unless LEPC-1 bids are in, it makes no sense to proceed with LEPC-2."
US contractor Air Products is the preferred technology provider for LEPC-1. For LEPC-2, technology is available from Air Liquide, Casale, Topsoe, Linde and others.
NLC has estimated a CAPEX of Rs4394cr ($627m) for the lignite to methanol project. Methanol produced will be sold to pharmaceuticals, paints, and formaldehyde factories and other industries in southern India, which has no methanol production facility.