CIL and GAIL Form Joint Venture to Develop Coal-to-SNG Facility

On August 5, 2024, the Ministry of Coal (India) in partnership with the Ministry of Power & Natural Gas (India), successfully brokered a groundbreaking joint venture agreement between Coal India Limited (CIL) and GAIL (India) Limited (GAIL). This strategic agreement represents a significant advancement in the energy sector, focusing on the establishment of a Coal to Synthetic Natural Gas (SNG) plant. The plant will utilize cutting-edge surface coal gasification (SCG) technology to convert coal into SNG, thereby enhancing energy efficiency and contributing to cleaner energy production.

The new plant, set to be established in the Raniganj area of Eastern Coalfields Limited, West Bengal, is designed to produce 80,000 Nm³ per hour of Synthetic Natural Gas (SNG). With an anticipated annual output of 633.6 million Nm³, the plant will require 1.9 million tonnes of coal, which will be supplied by Coal India Limited (CIL). This collaboration between CIL and GAIL represents a significant advancement toward the National Coal Gasification Mission, aiming to leverage the chemical properties of coal for cleaner energy solutions. The agreement was executed by Shri. Debasish Nanda, Director of Business Development for CIL, and Shri. R K Singhal, Director of Business Development for GAIL.

Synthetic Natural Gas (SNG) is a fuel gas primarily composed of Methane, which serves as a key feedstock for the production of various chemicals and fertilizers. The establishment of the new plant will play a crucial role in securing this vital raw material, thereby reducing reliance on imported natural gas. Additionally, it supports the Atmanirbhar Bharat mission by enhancing India’s domestic production capabilities and fostering greater self-sufficiency in the energy sector.

Shri M. Nagaraju, Additional Secretary of Coal, highlighted the significance of the coal gasification project involving CIL and GAIL during the signing ceremony, calling it a potential model for future initiatives. He emphasized that gasification is a top priority for the Ministry of Coal, given India’s vast coal reserves, and stressed the importance of utilizing these reserves in an environmentally friendly manner. Nagaraju urged for more coal gasification projects to reduce carbon emissions and assured that government support, including financial aid for viable gap funding, is available. He announced that Request for Proposals (RFPs) for financial incentives of Rs. 8,500 crores for coal and lignite gasification projects were released on May 15, 2024, with a submission deadline of November 11, 2024.

Shri Pankaj Jain, Secretary of the Ministry of Petroleum and Natural Gas (MoP&NG) highlighted the need for exploring alternative coal utilization strategies, such as coal gasification, to meet the country's emission targets. He emphasized that Supercritical Carbon Dioxide Gasification (SCG) represents a promising technology for converting coal into valuable syngas. This syngas can be further processed to produce synthetic natural gas, serving as a viable substitute for conventional natural gas. Additionally, SCG-derived products can be utilized as feedstock for domestically produced chemicals, currently reliant on imports, and for power generation.