JSPL to use pet coke from Paradip refinery to salvage Rs 100 bn CGP plant

Company's 6 million tonne steel mill costing Rs 350 bn at Angul to reach full capacity in a year

Naveen Jindal owned Jindal Steel and Power (JSPL) may soon tie-up with the Indian Oil's Paradip refinery for sourcing of pet coke to partly meet the fuel needs of its steelmaking facility based on Coal Gasification Plant (CGP).

With the company's CGP unit, built at a cost Rs 100 billion at its Angul steel complex, facing coal supply issues, it contemplates to go for a mix of fuel feeds to overcome the problem.

"We are trying different recipes to overcome the fuel problem of our CGP. We may use 15 to 20 per cent pet coke, which can be sourced from Paradip refinery of Indian Oil. Then 30 to 40 per cent can be imported coal. And the rest can be procured from Mahanadi Coalfields (MCL) mines of Coal India through linkage arrangement, said Naveen Jindal.

This apart, he said, the steel unit will use coke oven gas in the DRI (Direct Reduced Iron) plant to reduce dependency on CGP to produce sponge iron which is the intermediate for making steel.

Following the allocation of a coal block to JSPL in 2003, the company had started work on setting up a 6 million tonne steel mill at Angul which intended to make steel by using the sponge iron produced through the coal gasification route, a technological innovation claimed to be used first time in the world by JSPL.

However, soon after the completion of the first module of two million tonne steel capacity based on this model in 2012, the Supreme Court cancelled the coal block giving a big jolt to the company.

Subsequently, the company had tried to run the CGP plant by buying coal from the open market and through e-auction, but it didn't succeed. "We have now full coal linkage for our CGP plant. But apart from the price factor, the supplies are meagre compared to our needs," said a company official.

Hence, the company now pins its hopes on the mix of fuel feed like pet coke, imported coal, linkage coal and coke oven gas to fix the CGP problem.

With the CGP failing to take off, the company had tweaked its project in 2015 and gone for setting up a giant 4554 m3 blast furnace (BF), the largest in the country, to enable it to produce 4 million tonnes of steel annually to reach the project's intended capacity of 6 million tonnes.

The blast furnace, which went on stream last year, is now in the process of being ramped up. The BF is already operating at 0.2 million tonne hot metal per month and this is expected to reach the rated monthly capacity of 0.35 to 0.36 million tonnes hot metal next year.

"Overall, we are now producing 0.25 million tonnes of steel per month which is 50 per cent of the capacity. We hope to clock the full project capacity of 0.5 million tonnes of steel per month in a year's time," Jindal said.

He said JSPL has invested Rs 350 billion on the Angul project till date, meeting 95 per cent of the total project expenses.

On the proposed expansion of Angul steel plant from 6 million tonnes to 12 million tonnes, Jindal said, "let the 6 million tonne facility stabilise first, then we will expand it to 12 million tonnes. Let us first repay the loans incurred for the 6 million tonne project. Then using our own money, we will expand it to 12 million tonnes. We won't take any loan from the banks because it puts a huge burden on our operations." He said, about 25,000 people are now engaged directly or indirectly at the plant.

Four core steel making facilities of Angul project- blast furnace, DRI unit, basic oxygen furnace and CGP plant, were dedicated to the nation by Union steel minister Chaudhury Birendra Singh and petroleum & natural gas and skill development & entrepreneurship minister Dharmendra Pradhan on Saturday.