Coal-to-Chemical Process Becomes Increasingly Economical in India

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Researched by Industrial Info Resources India (Delhi, India)--India is the fourth-largest coal producer in the world, with a global share of about 7% to 8%. The country is increasingly using coal as a feedstock to manufacture chemicals, as the practice has become increasingly economically viable in the face of rising crude oil prices. The current shortage of natural gas and the need to reduce dependence on foreign oil has provided the basis for serious consideration of coal-based chemical plants in India.

Coal gasification can transform coal into methanol or natural gas, which can be used as the feedstock for major chemicals such as ethylene, propylene, ammonia and others. The investment required to manufacture chemicals out of coal is much higher than traditional methods, therefore the viability of coal-based chemical plants depends on the price of crude oil. Currently, when the price of crude oil remains above $80 per barrel, the viability of the coal-to-chemical process becomes possible, and with rising costs of crude oil there exists a strong case for this technology. However, there are environmental concerns about using coal as a feedstock.

A joint venture between Rashtriya Chemicals and Fertilizers Limited (RCF) (BSE:524230) (Mumbai, India), Gas Authority of India Limited (GAIL) (BSE:532155) (New Delhi) and Coal India Limited (BSE:533278) (Kolkata, India) will use this technology to produce urea, ammonia and ammonium nitrate at Talcher, Orrisa, where there are rich coal reserves. Another project by Bharath Coal Chemical Limited (BCCL) (Chennai, India) to produce ammonia using coal is planned at Orissa. China, the largest coal producer in the world currently leads in the number of coal-to-chemicals plants.

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