Shaleen Agrawal 
 
New Delhi: The government has allowed underground gassification of coal to be considered as one of the valid end uses for the purpose of allocating captive coal blocks to corporations, sources familiar with the situation told DNA Money.

The move, said to have been cleared last week, is expected to spell significant gains for Reliance Industries Ltd (RIL), as the country’s biggest company by market capitalisation had earlier evinced interest in projects for gassification of underground coal.

RIL plans to sell the gas thus obtained to third-party users such as fertiliser, chemicals, petrochemicals and power generation companies.

Indian law currently provides for allotment of captive coal blocks only to power generation units, iron and steel companies, coal washeries and cement companies for mining and using it in the production process.

But minister of state for coal, Santosh Bagrodia, said no final decision has been taken yet.

“Allowing coal gasification as one of the end-uses to allocate captive coal mines is still under consideration. It is premature to talk about it at this point of time,” Bagrodia said.

According to him, there is hardly any company in the world with the technical expertise to convert underground coal into gas.

RIL has recently applied to the coal ministry for allocation of a coal block in Assam for the purpose of gassification.

State-owned explorer ONGC is the only company to have undertaken underground coal gassification projects in the country through a tie-up with Coal India Ltd, Neyveli Lignite Corp and Singareni Coalfields.

An RIL spokesperson said the company intends to go ahead with its coal gasification plans provided it secures coal mines.

“Indian coal has very high ash content and one is not sure whether the technologies available globally would work here as well,” he said.

The company would look to source right technology from a foreign company for plans, he said, declining to give further details.

Source : DNAIndia