mm,here's a headstart on your research.this is an indian...

mm,

here's a headstart on your research.

this is an indian perspective on coal for ctl and note this parapgraph,

"For CTL projects, the government may consider allocation of blocks, but according to Jha, that allotment would have to be made from those blocks which are lying unexplored and where coal is available at substantial depths."

happy reading,

February 5, 2008:

By Rakesh Dubey: Coal India Ltd Director (Technical) N.C. Jha, said that Sasol of South Africa has approached Coal India to explore opportunities for developing coal-to-liquid (CTL) projects in India.


The company has asked its subsidiary Mahanadi Coalfields Ltd to examine the economics and feasibility of such a project, he said.

"Coal India would be willing to join Sasol in developing CTL projects, of course if it is viable," Jha said.

He said about two years ago, Sasol had approached Coal India, but after that they stopped and were scouting for other parties. However, they have now resumed talks with CIL.

Jha said the chairman-cum-managing director of Mahanadi Coalfields recently met Sasol representatives and showed them certain cites. Further progress is on, he added.

"If there is coal available and we are in a position to supply, then we will enter into a joint venture with Sasol. We have people, we can make investment, but we have to commit for supply of 5 to 20 million tons per annum of coal," Jha said.

He said CTL projects are being done in a few countries. Technology exists for converting coal directly to oil, but the only question is the price at which this technology exists.

Currently, crude oil prices are spiralling to the $100-mark and if this is too high, then if compared with price of fuel produced from CTL technology, the price of crude oil is far high, he said.

Jha said there are two processes to convert coal to liquid. One is direct process and the second is indirect. In the first process, coal is directly converted to fuel and in the second, it is first converted to gas and then to liquid.

The major producer of gas or oil from coal in the world today is Sasol of South Africa. The company had followed the indirect process, because for direct conversion, the investment and coal requirement is quite high.

"Now I have heard that they have stopped converting gas to liquid and using the gas directly for producing fertilizer and other such usages," he said.

Jha said Coal India talked with Sasol to find out what type of coal is needed for introducing such projects in India as most of the Indian coal does not have high carbon and converting this to liquid is costly.

Sasol made a presentation to the Planning Commission, but their presentation could not give concrete response to economics of the entire process and there is an impression that direct conversion technology would be useful if produced in bulk, that is, consumption of 20 million tons of coal per year, he said.

Now there is a debate on whether to use coal for generating power or use it for producing fuel, as the economics of converting coal to liquid is far more expensive than power. But if considered from the view point of transportation section, then it is cheaper, Jha said.

"The government has to take a stand. Incidentally, it is clear that the government wants this technology to pursue, as it recently notified that CTL projects would be considered as end user of coal and such projects may now be allotted coal blocks for captive uses," he said.

However, Jha said right now the number of blocks that can be allotted to end users are very limited. Whatever was available has been by and large allotted and the blocks that are available have not yet been explored.

The government has already allotted nearly 80 blocks with total reserve of 20 billion tons to various users. Even the rest of the blocks that have not yet been allotted are likely to be allotted in the next six months and there will not be a single block left for further allocation, he said.

For CTL projects, the government may consider allocation of blocks, but according to Jha, that allotment would have to be made from those blocks which are lying unexplored and where coal is available at substantial depths.

However, for allotting such blocks to CTL projects, it has to be found out that extraction of coal and then converting it to oil or gas is cost effective. So more exploration is the only way for allocation of blocks for CTL projects, he said.

"As of today, there is no block available, which can be allotted for CTL projects and blocks have to be created," Jha said.

Jha said direct conversion of coal to oil was experimented by Oil India Limited (OIL) in the Assam Coalfield areas. They came out with a rough figure that if coal is converted to oil, then the cost will be equivalent to $46 per barrel. However, in order to make this successful, there was need for allocation of blocks, which could produce 3 to 5 million tons of coal annually.

He said coal found in Assam fields has high carbon, low ash and 2 to 3 percent of sulphur. Availability of sulphur in coal is important for CTL projects, as it acts as a catalyst in direct conversion process.

"But it is not possible at present to produce 3.5 million tons per annum of coal from Assam fields in short term, but the same quantity of coal, whose quality is almost identical to Assam fields can be made available in Meghalaya, provided the state and Central governments take some concrete steps to stop illegal mining," Jha said.

He said currently about 5 million tons per annum of coal is mined by villagers and middle man and nearly all of it is supplied to Bangladesh and some other places within the country.

"We have recently written to the minister for north-east, Manishankar Aiyar. We have said if there is a way to stop illegal mining in Meghalaya, the coal can be channellised properly and can be made available for CTL projects," he said.

The company has also written to the Meghalaya government to stop illegal mining, which will become a dangerous trend in future. "If illegal mining is stopped, not only will CTL projects be benefited, the coal can also be used safely," he said.

Source: Coal Insights