Coal gas remains fuel of choice for ceramic producers

Vol 11, PW 20 (21 Feb 08) Midstream & Downstream

Ceramic manufacturers in Gujarat feel cheated by claims that Piped Natural Gas (PNG) is a cost-effective alternative to coal gas or LPG.

Two years ago the skyrocketing price of industrial use LPG forced ceramic producers in the Morvi industrial triangle - consuming until then up to 8500 tonnes of LPG per day - to abandon LPG en masse to the point where consumption slumped to just 700 tones per day. Most ceramic producers switched to coal gas, but others switched to PNG, a decision they now regret, as prices shoot up.

Examine the calorific value of LPG vis-أ -vis PNG to understand their dilemma. Put simply, one KG of LPG has a calorific value of 12,000, while one cubic metre of PNG has a calorific value of 8300.

You need to burn 1.44 cubic metres of PNG to burn the equivalent calorific value of 1kg of LPG (12,000). "We realised that we had opted for a cheaper gas," explains Raju Patel, of Morvi-based Phase Ceramics.

"But we had to consume more quantities of it and this raised our fuel cost." When PNG supplies first began, LPG cost Rs29.06 per kilo, but today ceramic manufacturers who have switched to PNG are paying Rs.30.99 for the equivalent calorific value quantity (1.44 cubic metre).

"Instead of reducing our fuel cost," adds Velji Patel of the Morvi Ceramic Floor Tiles Manufacturers Association, "We have actually increased it by Rs1.93." What are the options Many ceramic manufacturers are again turning to coal gas, encouraged by a state government subsidy of Rs1 lakh ($2500) on the purchase of coal gasifying kit, which costs anywhere from Rs7 lakh ($17,500) to Rs25 lakh ($62,500) depending on capacity. Calorific arguments also hold sway: one kilo of coal priced at Rs7.5 emits enough gas with a calorific value of 6000.

Two kilos of coal priced at Rs15 will give you the same calorific value as one cubic metre of PNG, costing the vastly higher amount of Rs30.99 (including taxes). "Our saving using coal gas instead of PNG," concludes Patel, matter of fact, "is Rs16 per kilo."