Banerjee: New horizon

Calcutta, Sept. 4: Gail (India) Limited is all set to venture into a coal-gasification project in China.

The company is considering a joint venture with Shaanxi Huashan chemical industry group to pursue the project which involves turning coal gas into petrochemical products through the methanol route.

The two companies will first carry out a feasibility study for the proposed project.

A team of Gail officials led by its chairman and managing director Proshanto Banerjee had detailed discussions with the Chinese on the project during their recent visit to the country.

“We are looking at setting up a coal gasification-based petrochemical plant to produce polyolefins and other products in Shaanxi province in China. This province has abundant quantity of coal available at competitive prices,” Banerjee told The Telegraph.

Gail is the only Indian public sector gas utility to venture into China. It already has two gas distribution joint ventures there. The proposed joint venture with Shaanxi will also undertake distribution and marketing of the products in China apart from setting up the plant.

Shaanxi Chemical is already operating a fertiliser plant based on old coal gasification technology and willing to adopt the modern Shell coal gasification technology to upgrade its plant.

In China, 12 plants based on the shell gasification process are under different phases of construction and will be operational in 2006. The gas produced from these plants will be used for manufacturing fertilisers, methanol and hydrogen.

Banerjee said Gail was considering similar projects in India as well.

“Gail will use domestic coal to produce synthesis gas or ‘syngas’ by using shell coal gasification process, which will be used for the first time in India. The process has an inherent capacity of handling high ash content and hence is suitable for Indian coal,” he said.

Gail plans to set up a Rs 750-crore coal gasification project in eastern India with a coal-handling capacity of 2,000 tonnes per day to produce 3.4 MMSCMD of syngas. Industries in eastern India ? now running on liquid fuel ? can save huge costs by using synthesis gas that can be made available at $3 per mmbtu.

Eastern India is endowed with abundant volume of coal in Bengal, Bihar, Jharkhand and Orissa. The locations identified for setting up the project are Haldia, Durgapur and Talcher.

A detailed feasibility report by Uhde India Ltd on the proposed project is expected to be ready by October 2005.

Gail is also in talks with Coal India Limited for jointly evaluating various over-ground coal gasification technologies available in the industry.