Tata, Jindal Steel pip RIL for $6-8 bn CTL project

The Tata group's joint venture with Sasol of South Africa, and Jindal Steel and Power have pipped Reliance Industries (RIL) and state-run GAIL to the post and got shortlisted for the prestigious $6-8 billion project to convert coal into liquid petroleum.

An Inter-Ministerial Group that scrutinised applications from 22 firms has recommended awarding the coal-to-liquid (CTL) pilot project to the Tata-Sasol JV -- Strategic Energy Technology Systems -- and JSPL, a top government official said.

Coal-abundant India has been pushing for the CTL project to cut its dependence on imported oil. The project will produce 80,000 barrels crude oil per day (about 4 million tonnes a year) by liquefying coal reserves. The IMG has recommended the two companies for the award of coal blocks for the CTL projects.

In all, 22 firms including RIL, Anil Ambani Group's Reliance Infrastructure, SAIL, GAIL, IndianOil, GMR Infrastructure and Vedanta had applied for the pilot projects in Orissa.

From this, the IMG shortlisted firms having a minimum net worth of Rs 4,000 crore and an agreement with a foreign firm for technology to convert coal into liquid petroleum and called for presentations.

The official said RIL's proposal was not accepted as it had offered a direct liquefaction process, which was not favoured considering the low reactive content of coal.

GAIL and GMR did not submit agreements with the technology provider, as required for selection. The two firms, however, submitted copies of letters from technology providers after the IMG had finalised its report, and the Chairman of the panel rejected them, he said. While SAIL had withdrawn its application, Vedanta did not submit the additional information sought.