Date:26/07/2006 URL: http://www.thehindubusinessline.com/2006/07/26/stories/2006072604500200.htm

ONGC in talks with Shell for coal gasification projects

Pratim Ranjan Bose

Working together
"We are working on proposed pilot projects in coal gasification. We have also short-listed a few locations for both surface and underground gasification."

Kolkata , July 25

Oil and Natural Gas Corporation (ONGC) maintains that negotiations are on with Royal Dutch Shell for the proposed ventures in underground and surface coal gasification as per the MoU signed between both the partners. Shell has proven technology in coal gasification.

In January, ONGC had entered into a MoU with Shell Exploration Company BV — a subsidiary of Royal Dutch Shell — highlighting future collaboration across the energy value chain including exploration and production of oil and natural gas and CBM (coal bed methane), coal gasification, oil products, refining and petrochemicals.

"We are working on proposed pilot projects in coal gasification. We have also short-listed a few locations for both surface and underground gasification," a company official said, adding that the first pilot project was expected to be commissioned this year.

ONGC had long-term plans to enter into a joint venture with Shell for setting up coal gasification projects on a commercial scale.

The company has proposed a 50:50 joint venture with Coal India Ltd for underground coal gasification projects in technical collaboration with the Stochinsky Institute of Russia. An MoU was also signed with Neyveli Lignite Corporation for taking up these projects. Meanwhile, ONGC's initiative to rope in Shell as a partner in the third round of coal bed methane (CBM-III) did not succeed. "We wanted to jointly bid with Shell in CBM-III round. However, the effort could not materialise as Shell could not come out with a timely clarification on the terms and conditions involved," the official said.

Shell is a global major in the emerging energy option of coal bed methane.