The joint venture of Tata Group with Sasol of South Africa, Jindal Steel and Power has beaten Reliance Industries Ltd (RIL) and state-run GAIL. The Tata Group has been shortlisted for the prestigious USD 6-8 billion project to convert coal into liquid petroleum.
According to a top Government official, 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 Ltd and JSPL.
India has a profusion of coal. This reason is working as a catalyst for the CTL project to cut its dependence on imported oil. The liquid coal reserves will produce 80,000 barrels crude oil per day (about 4 million tonnes a year). The IMG has recommended the two companies for the award of coal blocks for the CTL projects.
Altogether, 22 firms including RIL, the Anil Ambani Groups Reliance Infrastructure, SAIL, GAIL, Indian Oil, GMR Infrastructure and Vedanta had applied for the pilot projects in Orissa.
Among the companies, the IMG shortlisted firms which have a minimum net worth of Rs 4,000 crore and an agreement with a foreign firm. These firms were allowed to convert coal into liquid petroleum and called for presentations.
According to an official, RILs proposal was not accepted because it had offered a direct liquefaction process. The proposed process was not favoured considering the low reactive content of coal.
As recommended, the selection needed agreement with the technology provider. No submission has been noticed in case of GAIL and GMR. As the official said, 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. While SAIL had withdrawn its application, Vedanta did not submit the additional information sought.
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