Govt seeks help from Naveen Jindal-promoted JSPL to salvage Talcher fertiliser plant
Reuters | Photo Credit: Reuters

In its quest for a suitable coal gasification technology for the Rs9,000-crore Talcher fertiliser plant in Odisha, the central government has requested Naveen Jindal-promoted Jindal Steel and Power Ltd (JSPL) to share its experiences with the processes used at the company’s Angul plant.

In December 2014, a consortium of four state-run units including GAIL (India) Ltd, Coal India Ltd, Rashtriya Chemicals and Fertilizers Ltd (RCF) and Fertilizer Corp. of India Ltd signed an agreement to set up a coal gasification-cum-fertiliser plant at Talcher. Gas produced from coal gasification is to be used as fuel for fertiliser production.

While Narendra Modi-led National Democratic Alliance government is pulling out all stops to ensure that farmers get a regular supply of fertilisers, the Talcher project has hit the skids with project consultant SBI Capital Markets Ltd raising doubts over its feasibility, as reported by VCCircle on 12 April.

“A meeting was called under the chairmanship of the chief executive officer of Niti Aayog on 13 April to decide upon the future of the Talcher project. However, since there is status quo on the issue of coal gasification technology, it has been decided to call upon JSPL to share their experience with the technology which is being used at its Angul DRI (direct-reduced iron) plant,” said a department of fertilizer official requesting anonymity.

DRI, popularly known as sponge iron, is produced by using gas to reduce oxygen content from iron ore. JSPL’s Angul DRI plant uses Lurgi Technology Co. SA’s technology to produce gas from high ash content coal after the Utkal B-1 coal block was cancelled after a 2014 Supreme Court ruling.

Another department of fertilizer official, who also didn’t want to be identified, confirmed the development and said that state-run Projects and Development (India) Ltd in its report had earlier recommended that the project is viable. 

A senior PDIL executive on condition of anonymity confirmed its recommendation.

India’s demand for urea in 2015 was 31 million tonnes (MT) out of which around 8 MT was imported mainly from China and Iran during the financial year ended 31 March 2016. According to information available on the website of the ministry of chemicals and fertilizers, the Talcher project will produce 1.3 MT of urea and few other fertilisers as well.

While queries emailed to the spokespersons department of fertilizers and Niti Aayog on 18 April remained unanswered, a JSPL spokesperson in an emailed response said that the company’s experience of coal gasification has been satisfying and it has been a reliable source of supply in the steel-making process.

Queries emailed to spokespersons of PDIL on Wednesday weren’t immediately answered.

According to experts, there is no dearth of proven technology for coal gasification but the Indian government needs to be cautious. 

“China also produces urea from coal gas. But in the context of more shale gas coming and gas prices coming down, the question of competitiveness for use of coal gas comes around,” said U.S. Jha, former chairman and managing director of RCF.

He added that coal from Talcher can be made fit for coal gasification by washing it, but it will involve additional costs.

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