GAIL, RCF enter JV for coal gasification project

Gail India Ltd has informed that the Company and Rashtriya Chemicals and Fertilizers Ltd (RCF) have entered into an MOU for setting up of a coal gasification project by the Company and utilization of the coal gas produced for setting up a fertilizer plant by RCF at Talcher, Orissa. The MoU was signed here on December 28, 2007 by Mr. A K Purwaha, Director (Business Development), of the Company and Mr. H S Karangle, Director (Technical), RCF in presence of Dr. U D Choubey, CMD, of the Company and Shri U S Jha, CMD, RCF.

As part of MOU, the Company will undertake the Techno-economic study for setting up a Commercial Coal Gasification Plant for production of Synthesis Gas, and RCF will carry out the techno-economic study for setting up a commercial plant to produce fertilizer by utilizing the synthesis gas from the proposed Coal Gasification Plant.

Speaking on the occasion, Dr. U D Choubey, CMD of the Company, referred to the critical role of fertilizers in a predominantly agricultural country like ours and the imperative of providing this input to the farmers at a reasonable price. Gas, he said, had always been a preferred feedstock for fertilizers but there is a large demand supply gap of natural gas and therefore considerable efforts are afoot to look for alternate sources of energy. Surface coal gasification, he said, provides a promising alternate source of gas which can also meet the feedstock requirement of the fertilizer industry. This was recognized by both RCF and the Company and he was confident that the project will be a success.

The project would entail an investment of around Rs 2400 crore for setting up the coal gasification plant.

The Company had earlier commissioned a study by Udhe India for examining the potential of the project and it is estimated that the project will help produce 7.76 MMSCMD of synthesis gas (equivalent to 3000 tonnes per day of ammonia) and 3500 tonnes per day of Urea. The Company will focus on the production and marketing of synthesis gas which will be in line with its core function of gas handling.

Both the Companies will also jointly evaluate the potential of Coal Gasification for fertilizer industry and provide assistance to each other for successful implementation of respective projects.