Reliance, NLC explore new project to boost domestic gas supply
What's the story
NLC India and Reliance Industries have teamed up to explore an underground lignite gasification project in Gujarat. The collaboration comes as a response to the global fuel crisis and aims at boosting domestic gas supplies. The project will look into the feasibility of converting lignite reserves into synthesis gas, which could enhance energy security and reduce dependence on imported fuels.
Project details
NLC India and Reliance join forces
The public sector undertaking, NLC India, has signed an agreement with Reliance Industries to explore the underground gasification of lignite reserves. The two companies are currently conducting preliminary technical studies for this project. NLC India holds two lignite blocks in Gujarat that are being considered for the project. Reliance was chosen for its expertise in gasification technologies.
Energy security
Addressing the gas shortage issue
The underground lignite gasification project could be a potential solution to the domestic gas shortage, worsened by the global fuel crisis. If successful, it could provide an alternative source of synthesis gas for industrial use. This would also help strengthen energy security by reducing dependence on imported liquefied natural gas (LNG).
Expansion strategy
NLC India's plans for lignite monetization
NLC India, a state-run miner and power producer, is looking for alternative ways to monetize its lignite resources. The company is also planning to set up a lignite-to-methanol plant at Neyveli in Tamil Nadu. The project, which will cost ₹4,394 crore, is likely to be completed by next year as part of NLCIL's diversification plan.
Policy backing
Union Cabinet's approval for gasification scheme
The Union Cabinet recently approved a ₹37,500 crore scheme to promote surface coal and lignite gasification projects. The scheme aims to gasify around 75 million tons of coal and accelerate India's coal and lignite gasification program. It also supports the national target of gasifying 100 million tons of coal by 2030, marking a major step toward strengthening energy security.