KOLKATA (miningweekly.com) - The Indian government was working on a draft policy on underground coal gasification (UCG) to kick-start projects at coal blocks that had been identified but idled for over two years.
The Coal Ministry had identified two coal and five lignite blocks across the country for developing UCG projects but lacunae in the legislative framework were proving a hindrance in awarding the blocks to Indian and overseas companies with the requisite technological know-how to implement commercial UCG projects, a Coal Ministry official said.
The two coal blocks selected for UCG projects were Yellendu, in the newly created province of Telengana, and the Bandha-Singrauli Main basin, in Uttar Pradesh, in northern India.
The five unexplored lignite blocks were Sindhri West, Chokla North, Nimbalkot and Nagurda, in the central Indian desert province of Rajasthan and Dungra, in Gujarat, in the west.
The official said that necessary changes had been made in mining legislation to enable production of syngas for end-use purposes through amendments in the Coal Mines Nationalisation Act and the Mines and Minerals (Development and Regulation) Act, the official added.
At the same time, miner Coal India Limited (CIL) was pushing ahead to develop UCG projects at coal and lignite blocks under its control.
The miner had received five proposals from Indian and overseas companies offering to partner with CIL for gasification projects that it planned.
According to the official, Australia’s Linc Energy, US-based Lemar LLC, and the Malaysian Essem Group, as well as Indian companies Reliance Power, Jindal Steel & Power, Chetna Group, GAIL India Limited and Maheshwari Group, has submitted offers in response to a CIL tender seeking partners for UCG projects.
CIL’s UCG projects were planned at the Kaitha coal block, in the eastern Indian province of Jharkhand, with estimated coal reserves of 166-million tonnes and the Thesgora block, in the central Indian province of Madhya Pradesh, with estimated reserves of 187-million tonnes.
Among the issues to be addressed by the policy were the model terms and conditions for collaboration between companies for the development of UGC projects.
It was mentioned that CIL was offering collaborating partners the chance to implement projects on a profit sharing basis. However, a section within the Ministry felt that this might not be the most effective way to attract private capital into the sector considering the high risks involved in commercial UCG production.
Despite the new initiatives to develop UCG projects across the country, India’s record in successful implementation of projects was poor with not a single project going on stream to date. UCG projects were first taken up by CIL and oil and gas exploration major ONGC Limited in the 1980s, with technical assistance from erstwhile USSR. However, all projects were abandoned in face of technical challenges.
According to a report by Central Mine Planning and Design Institute Limited, a technical consultancy arm of CIL, “CIL’s and ONGC’s attempts to carry out pilot scale projects for development of UCG were marred by a number of challenges”.
“Despite successful trial burns and technological advancements, full-fledged commercial scale UCG operations are not on the near horizon,” the report said.
Early last year, the Indian government had sought South Africa's collaboration on UCG technologies and the development of projects in India through joint ventures between companies in both the countries, but not much headway had been achieved, the official added.