Coal India to build new methanol plant in West Bengal

MUMBAI (ICIS)–State-owned Coal India Ltd (CIL) is planning to build a 676,000 tonne/year methanol project in the West Bengal state, a government source said on Wednesday.

The plant will be set up by CIL’s wholly-owned subsidiary South Eastern Coalfields Ltd (SECL) at its Dankuni Coal Complex (DCC), the source from the Ministry of Petroleum and Natural Gas said.

CIL plans to market the methanol from the proposed plant in India’s eastern states.

Pre-feasibility studies for the project have been completed, the source said, adding that financial aspects and timeline for the project were still being finalised.

The decision to fast track the methanol project, which was first mooted in 2017, was taken after the Indian government eased the norms for extracting coal bed methane (CBM) from coal seams in August 2018, he said.

In August, the Indian government approved a policy to allow contractors like CIL to explore unconventional hydrocarbons such as shale oil/gas and CBM on their existing acreages.

Earlier, contractors were required to apply for separate licenses to explore for unconventional hydrocarbons in the areas they leased from the government.

This move was expected to open up a significant part of India’s sedimentary basin to exploration for CBM and shale gas by national oil companies and other firms, the government said in its notification in August.

The government expects CIL and other state-owned companies such as Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL), Rashtriya Chemicals & Fertilisers (RCF), Steel Authority of India Ltd (SAIL) to help in increasing domestic methanol output by using CBM and coal as feedstock, the source said.

This move is part of the Indian government’s objective of reducing crude imports by 2030, through an increased use of alternative fuels like methanol.

Picture: A coal mine. (Source: Shutterstock)