Coal Liquefaction: Oil India plans second pilot project

(The Hindu Business Line November 11, 2006)

Oil India Ltd is planning to launch a second pilot project for coal liquefaction, which is a process that converts coal into petrol, diesel and other liquid fuels.

Many countries are working on liquifaction projects as an alternative fuel technology in the light of the spiralling crude oil prices.

Oil India will get down to commercial coal liquefaction only after analysing the results from the year long second pilot project according to Mr. M R Pasrija, Chairman and Managing Director.

"Global crude prices would be taken into account when we plan our first commercial coal liquefaction project," he told Business Line.

South African petrochemical major Sasol Ltd has plans to invest $6 billion in the coal liquefaction business in India.

Mr. Pasrija said that the second pilot project would require an investment of Rs 20 crore; Hydrocarbon Technologies Inc of the US is being roped in to provide the technology.

Oil India established its first pilot coal liquefaction plant at its R&D center in Duliajan, Assam

The second pilot will help identification of a proper coal liquefaction technology that would suit the Indian scenario.

Assam coal is considered to be the best for coal liquefaction due to its composition, as about 90 per cent of the coal is directly convertible into fuel.

The State is estimated to have about 900 million tonnes of coal reserves.

However, coal mining is difficult due to the inhospitable terrains where most of the reserves are located.

Mr. Arun jagatramka, Vice Chairman and Managing Director of Gujarat NRE Coke Ltd, said that if crude prices rise beyond $40 a barrel, commercial coal liquefaction is viable.

Given the current international crude prices, India should venture into this alternative fuel technology.