Coal India plans syngas projects near gas-based power, DRI and fertiliser units as gas supply tightens

State-owned Coal India plans to set up coal-to-syngas production units either at pithead locations or adjacent to user industries such as fertiliser units, direct-reduced iron and gas-based power plants amid disruption in gas supplies due to the West Asia conflict, sources said.

Coal India Ltd (CIL), which accounts for over 80 per cent of domestic coal output, has already initiated steps to develop such coal-to-syngas facilities.

In line with the National Mission on Coal Gasification and the government's vision to enhance domestic chemical and feedstock security, CIL intends to set up coal-to-syn-gas facilities to cater to the market demand for syn-gas in gas-based power plants/DRI or fertiliser plants, sources said.

The company plans to develop such facilities either on Build-Own-‘Operate (BOO) or Build-‘Operate-‘Maintain (BOM) basis, with syngas to be produced from coal by developers or consortia, they said.

Syngas serves as a versatile feedstock for the production of clean fuels, fertilisers, chemicals, and power generation.

Coal India Ltd has already floated an expression of interest for identifying prospective bidders to develop coal-to-‘syngas facilities on BOO or BOM basis, where developers or consortia will produce syngas from coal under two proposed models, sources said.

Under the first model, a syngas production facility will be set up at the CIL mine pit head areas with multiple industrial consumers.

The primary aim is to establish syngas hubs within available CIL land, preferably at pit heads, to supply syngas to nearby industrial clusters. This model aims to significantly bring down logistics costs by minimising coal transportation and enabling industries to receive syngas economically through a dedicated pipeline network.

Under the second model, the company plans to set up the syngas production facility adjacent to an existing gas-based power plant, DRI plant, fertiliser unit, or a single large industrial consumer.

This arrangement is designed to optimise both operational efficiency and supply reliability by positioning the syngas plant in immediate proximity to the primary end-use facility.

The objective of this model is the on-site generation of syngas next to the end user plant. By minimising the distance required for pipeline transport, the system ensures a dedicated and uninterrupted supply of syngas directly to a single anchor industry. This close integration supports tailored production to meet specific requirements of the off-taker.

In continuation and support of this initiative, CIL is also in lookout of potential industrial off-takers who will utilise the syngas produced from such facilities as feedstock or fuel under long-term arrangements.

The coal behemoth has also issued an expression of interest to assess market interest, preferred supply models, and commercial expectations of potential off-takers of syngas.

The primary objective of the expression of interest is to identify the potential industrial off-takers who are willing to utilise syngas produced from coal-to-syngas facilities established by CIL or its designated SPV(Special Purpose Vehicle), JV (Joint Venture) under BOO or BOM mode.

Coal India Ltd has been exploring possibilities to diversify into coal gasification to enable the production of syngas and downstream value-added chemical products.

CIL also has diversified into coal gasification by incorporating two JV companies with other Maharatna PSUs. Bharat Coal Gasification and Chemicals Ltd (BCGCL) is a joint venture company (JVC) of CIL and BHEL, in which CIL holds 51 per cent shareholding to set up a coal to ammonium nitrate project in Lakhanpur, Odisha Coal Gasification India Ltd (CGIL) is a JVC of CIL and GAIL, in which CIL holds 51 per cent shareholding to set up a coal to Synthetic Natural Gas (SNG) project in Bhadarpur, West Bengal.

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