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Leading Maharatna public sector companies Coal India Limited and GAIL (India) Limited have signed a landmark joint venture agreement for setting up a Coal to Synthetic Natural Gas plant using surface coal gasification technology, the Ministry of Coal announced on Tuesday. 

The plant to come up in the Raniganj area of Eastern Coalfields Limited in West Bengal is expected to produce 80000 Nm3 per hour of Synthetic Natural Gas (SNG). The annual production is slated at 633.6 million Nm3 per hour which will require 1.9 million tonnes (mts) of coal to be supplied by Coal India Ltd (CIL).

“The synergy and partnership of the two corporate giants is a big step towards achieving the goals of the National Coal Gasification Mission which facilitates the utilisation of chemical properties of coal,” the ministry said in a statement.

SNG is a fuel gas predominantly consisting of methane (CH4) which is a feedstock for the production of various chemicals and fertilizers. The upcoming plant would help secure the raw material and reduce the country’s dependence on imports of natural gas in accordance with the Atmanirbhar mission. It will also help to minimise carbon emissions in the economy as part of the fight against climate change.

Debasish Nanda, Director (Business Development) CIL and R K Singhal, Director (Business Development) GAIL inked the joint venture agreement on behalf of their companies.

M. Nagaraju, Additional Secretary, Coal, in his address at the signing ceremony mentioned that the commitment of CIL and GAIL to this project will be a role model. “Gasification is the highest priority area for the Ministry of Coal. India has been blessed with huge reserves of coal and these reserves should be utilised for gain in an environment-friendly manner,” he added.

He stressed the need for planning more coal gasification projects to minimise carbon emissions. He also said that all the possible support from the government is in place including financial support for viable gap funding. Request for Proposals (RFPs) for inviting eligible bidders (public and private) for financial incentives of Rs 8,500 crore under three categories for coal/lignite gasification projects were floated on May 15, 2024, for which the last date of submission is November 11, 2024.

Pankaj Jain, Secretary, the Ministry of Petroleum and Natural Gas, said that the alternative uses of coal for environment-friendly ventures like coal gasification should come up in future to meet the emission target of the country.