CIL focuses on output, not shale gas diversification

Coal India Ltd (CIL) has said its focus, for now, would be on raising output, not on diversification.

The government-owned company, the country’s near-monopoly producer, had diversification plans on coal liquefaction (CTL) and gasification. Last year, Partha S Bhattacharya, former chairman and managing director (CMD), had indicated CIL might foray into production of shale gas.

“We have to do diversification, but at this stage, our focus is only on increasing coal production and to meet the target. If we have to look into it, the foray would be to coal and coal-related items, rather than venturing into unrelated areas like shale gas,” said S Narsing Rao, the present CMD.

It has prepared a capital investment plan of Rs 32,000 crore for the next five years. The production target in 2012-13 is 464.1 million tonnes and it needs clearance for 70-odd projects from the government if it has to sign new fuel supply agreements with power companies.

The company had plans to foray into a CTL project with Sasol of South Africa, which has one of the largest CTL projects in the world, at Secunda in that country. Last year, CIL had written a letter to the coal ministry for allocation of the Deocha-Pachami block in West Bengal, with an estimated reserve of at least 19 billion tonnes, for the CTL project. Sasol and the Tata Group had formed a joint venture for a CTL project in Odisha.

When asked about CIL’s plan, Rao said, “This is an important decision which the nation has to take, not Coal India alone. Except for Sasol, CTL projects are yet to take off in other parts of the world. In China, too, CTL projects are yet to come up. So, in the Indian context, it would take some time to be a reality.”

He also hinted about coal-bed methane (CBM) as a possible option. “It needs different regulatory and technological requirements. Our exploration is up to 600 metres and exploitation is up to 300-400 metres. For CBM, you have to go up to even 1,000 to 1,200 metres,” he said.