Govt to auction mines for coal-to-gas, CTL projects in FY18

The government will put under the hammer coal blocks for private coal-to-gas, liquid and polychemical projects this financial year, a top official said today.

"My priority is very clear... coal-to-gas, coal-to- liquid, coal-to-polychemical (CTL). That is something which I want should move... I think very soon, in about two months, we should be coming out with some blocks to be offered to the private sector for these projects," Coal Secretary Susheel Kumar told PTI in an interview.

The development takes on significance as domestic coal gas can help lower the country's import bill by USD 10 billion in five years and cut carbon emission.

"So, Coal India will attempt all this from whatever coal mines they have. Second, fresh coal blocks would be auctioned to the private sector through competitive bidding for exploring coal to gas, liquid and polychemicals. We will auction the coal mine for these projects," the secretary said.

The process of identification of blocks is under way, he said, adding that mines will not be out of the 204 cancelled blocks, but will be fresh ones under the MMDR Act.

"There is a technical committee which is identifying these blocks. So, I have asked them to identify and come back," he said.

Asked to provide a timeline for the competitive bidding, the secretary said, "(It should be) this financial year because we may have to go to the Cabinet. So, let me first get those identified, then we will go to the Cabinet to seek mandate and do it."

India's dependence on petroleum and natural gas can be reduced or done away with if the country manages to secure gas from coal.

"Why we want to do this is very clear. Because it is something which is unexplored for the country. It requires some new technology. It requires new partners. So, those companies who would like to venture into this area should be assured of at least the coal block so that they can plan their investment," Kumar explained.

"We will have to take a mandate from the Cabinet that we want to explore these areas which are non-traditional in the coal sector. Normally, coal is consumed in the sense of burning it... The root is whether it is going to be converted into something very useful... we have to explore that because we don't have enough of gas or oil, but we have coal," he said.

Imports of 4-5 chemicals like urea, methanol, ammonia and ascetic acid are worth around USD 5.5 billion at present.

If the country is able to gasify coal and use the same for production of chemicals, including urea and methanol, it would lower the import bill manifold by 2030.