Image Courtesy: L&T

 

It is a tale of two steel projects located at Hazira in Gujarat. Hit by gas shortages, Essar Steel India Limited (ESIL) and L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) have decided to opt for coal. 

The latter finds coal gasification highly economical to produce synthesis gas (syngas) as natural gas substitute for its expansion project costing Rs 325 crore. The former, on the other hand, finds this clean coal route expensive for its Rs 6270- crore project, which would replace closed natural gas-based steel capacity with the conventional coal-based one.

The mothballed steel capacity of 3 million tonnes per annum (mtpa) is split among four units identified as modules I to IV at ESIL’s Hazira steel complex.

The company intends to switch over this capacity from gas-based steel production process named direct reduction iron (DRI) process to conventional coal-based one named blast furnace technology.   

In a letter to the Government, ESIL says: “Due to non-availability and extremely high price of natural gas, DRI based production has become unviable beyond a limit. We are therefore, proposing to substitute 3.0 MTPA DRI production by blast furnace based hot metal production.”

ESIL’s project provides for installation of a blast furnace with a capacity to produce 3 MTPA of hot metal, sinter plant with a capacity to produce 1.5 MTPA.

Sinter, an agglomerate of a few raw materials, serves as vital input for blast furnace. 

Apart from phasing out DR modules I-IV, the project envisages setting up of a coke oven plant 1.35 MTPA for producing coke for blast furnace and setting up of an air separation unit.

Says ESIL, “A major reason, which has triggered the need for reconfiguration of the 9.6 MTPA Hazira facilities, is the cost and availability of natural gas. At the time of conceiving the DRI/ HBI (Hot Briquetted Iron) facilities, based on the then prevailing gas prices and its availability, such facilities were having a fairly competitive operating cost as inputs for steel making. Of late, due to limitation in respect of the availability of natural gas as well as high cost of gas, the relative cost of producing DRI/HBI has significantly increased. Consequently, DR Modules 1 to 4 are not being operated (however, DR module 5 to 6 are being operated based on gas from Corex plant) and as a result, ESIL has been operating at much less than the installed capacity.”

The company intends to utilize gases generated by coke oven plant to produce power and to operate downstream secondary steel operations, thereby reducing its dependence on natural gas. 

“After implementation of the Project, the plant will be able to resuscitate itself to producing steel and finished steel for the capacity it has been built,” it exudes.

ESIL believes that “the cost of production of syngas (coal gasification), though somewhat cheaper than natural gas, is still a relatively more expensive option for production of metallics for steel making as compared to production of hot metal via blast furnace route.” 

LTSSHF, on the other hand, contends that coal gasification “is very much cost effective as compared to natural gas or liquid fuels.”

It explains: “The major advantage of gasification is that coal is converted into a gaseous fuel which is easy to handle and is a clean form of energy. In the gaseous form it enables to substitute petroleum products and natural gas. The synthesis gas produced shall have a wide range of applications. It shall be used in a combined cycle system for efficient and clean generation of electric power; it is suitable for the manufacturing of hydrogen and chemicals such as ammonia, methanol, acetic acid etc.; as a substitute of natural gas, and as a reducing gas for metallurgical purposes etc. In our case we intend to use the coal-gas for partial substitution of NG, in our heating applications, primarily in the re-heating and heat treatment furnaces.”

LTSSHF, which is a joint venture between L&T and Nuclear Power Corporation of India Limited (NPCIL), proposes to install a coal gasifier as part of its project to ramp up existing capacity for manufacture of steel ingots, castings & liquid steels  to 5,30,000 tonnes per annum (tpa) from 80,000 tpa. 

The company caters to specialized requirements of nuclear, refinery, petrochemical, power, ship building and heavy engineering industries, according to LTSSHF’s project feasibility report.