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    HomeBusinessNLC plans ₹4,400-crore lignite-to-methanol project 

    NLC plans ₹4,400-crore lignite-to-methanol project 



    M Ramesh | Updated on: Jun 08, 2022

    The project is expected to be implemented by an overseas technology supplier

    NLC India (formerly, Neyveli Lignite Corporation) is working on a pilot project for production of 1,200 tonnes a day (400,000 lakh tonnes a year) of methanol using 2.5 million tonnes of lignite.  

    “The feasibility report is ready and has been approved by the board,” NLC India’s Chairman and Managing Director, Rakesh Kumar, told BusinessLine. Kumar said the ₹4,400-crore project would be implemented on a debt-equity ratio of 80:20. 

    The project is expected to be implemented by an overseas technology supplier, yet to be selected, on a lumpsum turnkey basis. Engineers India Ltd is likely to be awarded the project management contract.  

    In coal-to-methanol or lignite-to-methanol plants, coal or lignite is first gasified into synthesis gas (syn gas) by mixing pulverized coal or lignite with an oxidant such as oxygen or steam. The syn gas — which is very hot (about 1,800 degrees Celsius) — is a mixture of carbon monoxide and hydrogen, and is a building block for production of a range of chemicals, including methanol. 

    Lignite, which has a much lower ash content than coal (around 6 per cent compared with 20 per cent and above for coal) is more suitable for gasification than coal, Kumar said.  

    The company, which has land and lignite for the project, has requested the Ministry of Coal to include the project in the Centre’s production-linked incentive (PLI) scheme, under which a financial incentive is provided for every unit of production sold, for five years. 

    At present, the PLI scheme covers four coal gasification projects; NLC India wants its project to be added to the list. 

    All the four projects are subsidiaries of the public sector coal mining major Coal India Ltd (see table). 

    The fourth project being worked on by Coal India and fellow BHEL, is for surface coal gasification for the production of ammonium nitrate.  

    Coal gasification makes it possible to use coal with much less carbon dioxide emissions. Methanol can be mixed with petrol or can be converted into di-methyl ether (DME) and mixed with diesel for running vehicles and ships. 

    Published on June 08, 2022

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