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`Synthetic petrol from coal in 5 years' -- Tie-up with Sasol Mining mooted

Ambarish Mukherjee

NEW DELHI, Dec. 8

IN a move that may have far-reaching consequences on the country's economy as a whole, the Government is contemplating on a plan to produce synthetic petrol in the country through a technological tie-up with Sasol Mining Company of South Africa routed th rough the South African Government.

``If everything runs smoothly and no hurdles crop up either at the policy level or in the process of working out the technical agreement or anywhere else, then the commercial production of synthetic petrol could commence in India five years from now,'' s aid the Union Coal Secretary, Mr N.K. Sinha, while talking to Business Line.

The technology of producing petrol from coal through liquefaction was primarily developed in Germany during the Second World War when they were barred from importing crude oil. But since then, Germany has not updated the technology and it is currently av ailable with only two companies, namely Petronet of Malaysia and Sasol Mining Company of South Africa. However, only South Africa currently produces synthetic petrol to the tune of 50 million tonnes annually from around 34 million tonnes of coal by combi ning the coal carbon with hydrogen.

Mr M.K. Thapar, Advisor (Projects), Ministry of Coal, and a member of the eight-member official team that had visited the Sasol facility in South Africa, told Business Line that ``It is a three-phased technology. First, the solid coal is converted into a gaseous form and then combined with hydrogen. After this, it is liquefied to get what is called oil or synthetic petrol and its fuelling capacity is as good as natural oil''.

But this is a closely-held technology with the South African firm and it is not ready to part with it. Hence, it is being contemplated that a joint venture in which Sasol might be a substantial equity holder be set up for such a facility in India.

Three Central Ministries, namely the Ministry of Petroleum and Natural Gas, the Ministry of Coal and the Ministry of Fertilisers will be involved in this project. A joint team of the Ministries is also expected to be set up shortly. The Fertiliser Minist ry also has plans to produce fertilisers from gasified coal once the entire plan goes through and the details are worked out.

The Union Coal Secretary said the domestic production would be preceded by a pilot project which would be followed by international tendering. Producing synthetic petrol, however, is economically viable only if the selling price is at around $20 per barr el.

``In the current scenario of high international prices of crude oil and the consequent burden of high foreign exchange requirement, it is prudent for the country to look to other avenues for self-reliance in this area. In view of the large coal reserves in the country, promotion and use of technologies for coal liquefaction is highly desirable and it is understood that substantial resources of coal is amenable to liquefaction,'' Mr Sinha said.

Mr Thapar said that ``for countries such as the US which have high reserves of both coal and oil it may not be an attractive option, but for countries rich in coal and poor in oil, this sort of technology can be of great use, particularly since oil price s are very much dependent on so many divergent factors''.