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Eight comapanies keen on partnering Coal India for gasification

Five Indian and three foreign companies have evinced interest in partnering with Coal India to undertake underground coal gasification on two blocks that the state-run monopoly is offering.

"At a recent pre-tender meeting, companies like Australia-based Linc Energy, California's Lemar LLC, Malaysia-based Essem Group, Reliance Power, Jindal Steel & Power, Chetna Group, Gail and Maheshwari Group showed interest in underground coal gasification projects at the blocks being offered by Coal India," a senior Coal India executive told ET.

Underground coal gasification (UCG) is a chemical process by which coal is converted to a combustible gas at the seat of the reserve. This gas is then extracted for commercial use. UCG offers a potential mean of extracting energy from deepseated coal deposits, which cannot be mined at present due to techno-economic reasons.

Coal India is offering Kaitha block, which has an estimated reserve of 166 million tonne at Ramgarh Coalfield, under the command area of Central Coalfields at Jharkhand. It is also offering Thesgora 'C' block, with an estimated reserve of 187 mt at Pench-Kanhan Coalfield, under Western Coalfields in Madhya Pradesh. According to the model being offered by Coal India, the gassification project will be undertaken by the service provider and it will provide a percentage of the profit to the company.

The project will have to be taken up in three stages over 25 years. The developer will examine suitability of the block through pilot well drilling in phase-I and II and, if found feasible, phase-III would be taken up.

Phase I includes exploration, phase II would be pilot assessment, while the third phase would be commercial production. There will also be an exit option after completing committed work of phase-I and phase-II without any financial liability to CIL. Entire work right from exploration to commercial development will be carried out by the identified service provider at their cost.

Source: The Economic Times