official Coal company Coal India Limited is preparing to make syngas from coal amidst the constraints in gas supply due to the ongoing tension in West Asia. Coal India will set up syngas production units for this. Syngas is usually a mixture of carbon monoxide and hydrogen. It is made from coal, natural gas or biomass and is used to generate electricity, fertilizer and fuel. According to sources, the company will install these syngas plants near coal mines (pitheads) or around industrial consumers like fertilizer plants, gas-fired power plants and direct-reduced iron (DRI) units.
Coal India has 80 percent share in the country’s total coal production.
Coal India, which has more than 80 percent share in the country’s total domestic coal production, has also taken initial steps in this direction. This initiative is considered to be in line with the National Coal Gasification Mission and the government strategy to strengthen the security of chemicals and raw materials. According to sources, the company is planning to develop the syngas plants on Build-Own-Operate (BOO) or Build-Operate-Maintain (BOM) model. In these projects, developers or alliances will produce syngas from coal.
EOI issued to identify potential bidders
Syngas is used in sectors like clean fuel, fertilizer, chemicals and power generation. Coal India has also issued EOIs to identify potential bidders. Under this, the company has proposed two models. Under the first model, syngas production units will be set up in Coal India’s mine areas, from where gas will be supplied to nearby industrial complexes through a pipeline network. Its objective is to reduce the cost of transportation of coal and to provide syngas to industries at cheaper rates.
What is the planning under the second model?
In the second model, syngas production units will be installed near a gas-fired power plant, DRI plant, fertilizer unit or large industrial consumer. This will help in increasing operational efficiency and reliability of supply. The company believes that this arrangement will ensure uninterrupted syngas supply to the end consumer. Coal India is also looking for potential industrial customers who can use the syngas as fuel or raw material under long-term agreements. For this, the company has issued a separate EOI to assess market interest, supply model and business expectations.
