October 11, 2008

Sasol TATA CTL plans hit roadblock

ET reported that Sasol and TATA Group's plans to establish India's first coal to liquid plant has hit a snag after last week's news that the Indian government is examining the possibility of allocating coal blocks to the Sasol TATA project.

The differences have arisen among the inter ministerial group set up to develop the roadmap that would allow the country to commercialize the CTL process.

According to the report, the main argument raised by those opposing the liquefaction projects, particularly TATA's collaboration with Sasol, is that India's coal resources should be reserved for use by the power sector rather than being offered for projects that put it to unproductive usage without aiding Indian's energy security.

The report said that "With India's 80% to 90% of future power projects coming up on coal, the fuel could hardly be spared for liquefaction projects that have yet to become popular even globally."

A CTL plant typically consumes up to 30 million tonnes a year of extractable coal reserves, half of which could support a coal based power project generating about 4000 MW.

The proposed Sasol TATA project aims to establish CTL facility with a production capacity of 3.6 million tonnes of oil and oil products a year. It has been suggested that Sasol believes the project would only be feasible if it can secure the up to 1.5 billion tonnes of coal required to feed the plant over its 25 year life.