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Coal India, GAIL to invest Rs 9000 cr in Talcher plant

Coal India

New Delhi: Coal India Ltd, the world’s largest producer, and state gas utiltity GAIL India Ltd today signed agreements to invest Rs 9,000 crore in a plant to convert coal into gas and use this fuel to manufacture fertiliser.

CIL and GAIL along with Rashtriya Chemicals and Fertilizers (RCF) and Fertilizer Corp of India Ltd (FCIL) will set up the integrate coal gasification cum fertiliser and ammonium nitrate complex at Talcher in Odisha by 2019, Fertiliser Minister Ananth Kumar said after the four firms signed joint venture agreements.

The plant will be built by the two joint ventures – the upstream consortia for converting coal into synthetic gas or syngas, and downstream plant to manufacture urea and other fertilizers.

GAIL will holds 35 per cent in the upstream venutre, called GAIL Coal Gas (India) Ltd. FCIL will take 11 per cent interest while RCF and CIL will pick up 3 per cent each each. The balance 48 per cent will be given to technology provider and financial institutions.

The downstream venture, Talcher Chemicals and Fertilizers Ltd would be led by RCF and CIL with 40 per cent stake each while GAIL and FCIL will take 10 per cent apeice.

The plant will manufacture 1.3 million tonnes of urea and other fertilisers annually, the Minister said.

“India is deficit in urea production. Currently, we produce about 22 million tonnes of urea and there is a gap of 10 million tonnes.

“By the time NDA completes its first term, India should become self-reliant,” he said adding besides reviving Talcher plant, plans are afoot to revive units at Gorakhpur, Barauni, Sindri and Ramagundam.

Oil Minister Dharmendra Pradhan said the upstream venture would cost Rs 3000 crore while the downstream fertiliser plant would be set up at a cost of Rs 6000 crore.

Two coal blocks have been earmarked for the project – of these one has been allocated and the other has been kept as reserve, he said.

The price of gas made from coal will be around USD 6.5 per million British thermal unit. This is compared to USD 5.61 per mmBtu price fixed for domestically produced conventional natural gas.

Power Minister Piyush Goyal said use of coal gasification technology for production of fertilisers will lead to annual subsidy savings of Rs 3,000 crore.

“We are working on reviving closed fertiliser plants using coal gasification or other cost effective technologies to increase the domestic production of urea. We aim to become a net urea exporter by March 2019,” Kumar said.

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