Coal India weighs methanol foray

06 March 2017

Coal India Ltd (CIL) is planning to diversify into methanol production at its Dankuni Coal Complex in Bengal.

The public sector coal miner has floated an expression of interest to select licensors of coal gasification technology who can produce synthesis gas on a commercial basis using good quality coal sourced from CIL’s Raniganj coalfield.

Synthesis gas (syngas) will be used to produce methanol, which will be used to make bio-fuel, a thrust area of the central government.

“CIL intends to diversify into a new coal-to-chemical business domain by converting high calorific value, low-ash thermal coal into chemical,” Coal India said in the expression of interest (EoI) document.

According to the document, in order to implement the project the coal behemoth has picked Dankuni Coal Complex to set up a coal-to-methanol complex using good quality coal from Raniganj coalfield

“The first step of this new venture will be the pre-qualification of coal gasification licensors who can produce syngas of required composition by using Ranigunj coal having ash content less than 28 per cent at a competitive cost,” the document said.

The syngas will be used to make methanol.

“The plan is to bring an internationally reputed player who is willing to offer technology to produce synthesis gas. The EoI is just the first step. The gas price has to be discovered such that the project becomes financially viable,” a CIL source said.

The approximate production volume of synthesis gas estimated by the miner is 180000 normal metre cubed per hour (NM3/Hr).

According to market observers, diversification into methanol could yield two-pronged benefit for Coal India.

First, CIL will be able to utilise the high quality and high priced coal of Raniganj for an alternative use, besides thermal power generation. It may be noted, offtake from Eastern Coalfields had taken a hit following last year’s price hike.

For Dankuni Coal Complex, which produces coal gas, a methanol plant could result in additional revenue. The unit is saddled with old machinery and equipment and faces a lack of demand for its major products.

One of the consumers of coal gas is Bengal government owned Greater Calcutta Gas Supply Corporation (GCGSC), which supplies gas to certain parts of the city as well as Howrah.

Source – Telegraph