L&T, UAE co eye ₹4,400 cr NLC project

In an interview, Motupalli said four companies have shown interest in developing the project and are in the process of placing their bids. He added that by the end of next month, the public sector company may be able to finalize and award the project.

In October last year, Engineers India Ltd (EIL), the project management consultant for the proposed development, floated a global tender for the project which is expected to have a production capacity of around 400,000 tonnes per annum.

“In terms of lignite-to-methanol or coal-to-methanol projects, as on date NLC is at the top of the list and we are actively pursuing for awarding the lignite-to-methanol project. The lignite-to-methanol project is already tendered and the technical tie-up is already done and we are expecting that by July-end we will be able to award the tender and parallelly the site preparation activity at Neyveli has already started. Once it is awarded the activity will start at the earliest,” he said.“Already four parties have expressed their interest and they are actively processing for quoting in this tender. One is global, UAE’s Petrofac, and L&T are also there and two more parties are there. It will be an EPC (engineering, procurement and construction) contract. We are giving the technology, they will be supplying and installing the system,” Motupalli added. The project is expected to be commissioned in 2027. L&T has been in the gasification business since 2004 and according to the company website it has executed and commissioned 11 gasification projects so far. Petrofac recently announced a partnership with OCI Global, a global player in ammonia, fertilizers and methanol for transportation and agriculture to deliver OCI’s programme of gasification-based green methanol projects.

NLC’s (formerly Neyveli Lignite Corporation of India Ltd) plan for the lignite-to-methanol project is part of its diversification plan, as it has traditionally been into lignite mining and setting up lignite-based power plants.

It recently incorporated its wholly-owned subsidiary NLC India Renewables Ltd to run its renewable energy businesses. The proposed lignite-to-methanol plant is in line with the government’s coal gasification plan, a sustainable way of utilizing the fuel to meet its ambitious net zero plans. In November 2021, the government launched the National Coal Gasification Plan and set an ambitious target to gasify 100 million tonne coal by 2030. However, the plan is yet to gain momentum and Centre is also considering a new set of incentives for companies taking up coal gasification including reimbursement of the goods and services tax (GST) paid for the coal procured for gasification.

In lignite-to-methanol or coal-to-methanol plants, coal or lignite is first gasified into synthesis gas, which is commonly known as syngas by mixing pulverized coal or lignite with an oxidant such as oxygen or steam.

The syngas is a mixture of carbon monoxide and hydrogen, and is used in the production of a range of chemicals, including methanol. According to experts, lignite, has a lower ash content than coal, thereby, making it more suitable for gasification than the latter.

Methanol, a low carbon, hydrogen carrier fuel is seen as a sustainable replacement of petrol and diesel. According to NITI Aayog, methanol economy in India will create nearly 5 million jobs through methanol production, application and distribution services.

Updated: 25 Jun 2023, 10:48 PM IST