Adani group intends to produce substitute natural gas (SNG) from imported feedstock at its coal to polygeneration (CTP) project to be set up with an investment of Rs 24,000 crore.

Polygeneration is the capability of a manufacturing complex to generate different products from one fuel/feedstock. 

The CTP, which would be India’s first such project, would produce 4 million metric standard cubic metres per day (MMSCMD) of SNG, 5000 tonnes per day (TPD) of methanol and 4000 barrels per day (BPD) of Fischer-Tropsch (FT) process-derived diesel and naphtha. It would also produce an additional 2.4 MMSCMD of SNG from Methanol and FT Plant and 237 TPD of sulphur as a by-product. 

It would also generate 320 MW of power from process steam generated within the CTP complex. The project will also include an air separation plant to supply oxygen to coal gasification unit. The entire complex would be completed within 48 months after receipt of all approvals.

Adani Group’s holding company, Adani Enterprises Limited (AEL) has incorporated a wholly owned subsidiary Adani Synenergy Limited (ASL) to implement CTP at Mudra in Gujarat. It would be located within the area of Adani Ports & Special Economic Zone Limited.

The project could become a trend-setter for marketing imported coal-derived SNG as compressed natural gas (CNG) for vehicles and as piped gas for residential and other buildings. SNG can also serve as the building block for certain fertilizer and chemicals.

At present, most of the companies are in race to set up liquefied natural gas (LNG) terminals for receipt of imported gas and its regasification for marketing it to different industries. 

CTP-type projects based on domestic coal have not taken off in the country due to several reasons including higher risk of failure inherent in use of high ash Indian coals, problems in securing coal block allotment and delays-prone approvals process. 

Two coal to liquids (CTL) projects approved by the Government in 2009 have proved to be a non-starters for want of requisite clearances such as environmental, forest, wildlife approvals and mining licence.

ASL would not require all such approvals as it would be located in already notified industrial zone and would use imported fuel. It would require environmental clearance from industrial and coastal regulatory zone angles as well as standard pollution control clearances.     

According to pre-feasibility report (PFR) on CTP prepared last month by ASL, “Since the entire land is vacant, hence no displacement and rehabilitation of local population is envisaged,”

PFR has estimated the post-tax Internal Rate of Return (IRR) for the CTP at14 % by assuming as 20 years as the project life. 

It says: “This CTP project has the potential to generate 6,000 jobs both directly and indirectly….Over 30 years of the project life, this project will generate substantial amount of Tax Revenue. In addition to the above benefits this project will strengthen the overall socioeconomic status of the people especially from Mundra and overall Gujarat.”

CTP plant would require about 16.0 million tonnes per annum (MTPA) of coal, which would be sourced from Indonesia/Australia. The project would also consume some amount of petroleum refinery by-product, petcoke, which would be blended with coal. The coal characteristics (ash percentage, size distribution) are key factors to determine the annual tonnage required.

PFR says: “SNG can be used as Town Gas (cooking gas) to replace LPG, as transportation Fuels (CNG) to replace Petrol. Methanol is used for making downstream petrochemicals/specialty chemicals. Methanol can be used as petrol blend (upto 20%), which is already widely being used in China in a massive way. In India the blending of Methanol with Petrol is yet to be notified. Diesel is mainly used in transport sector as automotive fuel and in industry for power generation. Naphtha is mainly used as a feedstock for cracker units in Petrochemical industries.”

PFR  observes that By 2020-30, India has to meet up the global diesel standards of Euro VI. The Euro VI standards will favor the ultra clean CTL diesel for blending with conventional diesel. The CTL Diesel is ultra clean and has higher Cetane Number. It would thus be treated as premium product.

PFR has underscored the importance of CTP project by showing the trail blazed by China in this area. China is set to produce 55 MMSCMD of SNG and 12 million tonnes per annum (MTPA) of transportation fuels from coal by 2015. 

In CPT, cleaned coal would be first converted to raw synthesis gas (syngas) in the gasification section. The raw syngas would later be treated to produce pure syngas, which is a mixture of carbon monoxide, hydrogen and methane (CO+H2+CH4). The treated syngas would be used in methanator to produce SNG, in methanol synthesis block to produce methanol and in FT block to obtain FT Diesel and Naphtha.

As regards the two CTL projects, the one promoted by Tata group as 50:50 Joint Venture (JV) with South Africa's Sasol, has proposed to set up its facility in Dhenkanal district of Odisha. 

Named Strategic Energy Technology Systems Private Limited (SETSPL), the JV would produce 96,000 BPD of liquids such as diesel, naphtha and liquefied petroleum gas (LPG). It would produce ammonia and sulphur as by-products. Expected to go on stream in 2020, CTL complex would include a 1080 MW captive power plant (CPP).  

The other CTL project is promoted by Jindal Synfuels Limited (JSFL), a subsidiary of Jindal Steel and Power Ltd It intends to set up its facility in Angul district of Odisha. It would have capacity to produce 80,000 BPD of liquids. It would also have 1125MW CPP. It would produce diesel, naphtha with sulphur, phenols and ammonia as by-products. This project is to be implemented in 48 months from the start of zero date.