Coal blocks too may get NELP
The government may consider a new policy on the lines of New Exploration and Licencing Policy (NELP) for awarding coal blocks for liquefaction and gassification.
By Subhash Narayan, TNN |
NEW DELHI: The government may consider a new policy on the lines of New Exploration and Licencing Policy (NELP) for awarding coal blocks for liquefaction and gassification. The move is aimed at promoting investment in this specialised area that is in a nascent stage of development.
The Budget has proposed that the definition of approved end-users for allocation of captive coal blocks may be expanded to include underground coal gassification and coal liquefaction. According to an official source, the proposal would have to be carefully implemented by adopting a policy so that the planned activities gets necessary investment.
A suggestion in this respect has also been made the ministry of petroleum and natural gas. The source said that ministry feels that it should also be involved in any decision on coal liquefaction and gassification as the activity would not merely involve production but also require marketing and transportation through pipelines.
In fact the petroleum ministry had earlier objected to a proposal in this regard from coal ministry suggesting that it had more expertise in dealing with competitive bidding process involving gas and oil as is evident from the success of NELP rounds.
While coal ministry sources said that the ministry was not averse to the suggestion on a new policy, it would take a decision only when guidelines are framed on the lines of budget announcement.According to present system, coal blocks for captive use is given to core sector industries including power, cement and steel sectors.
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The allocation is decided by a screening committee headed by coal secretary. However, coal liquefaction (converting coal-to-oil) and gassification would require huge investment and technical expertise. Therefore the thinking is that a bids should be invited before blocs are allocated for the new activity.The proposal once implemented would require an amendment to the Coal Mines (Nationalisation) Act 1973 to facilitate competitive bidding. Coal liquefaction and gassification may see interest from power and oil companies like Reliance, Tatas, Essar, NTPC etc.
A pilot project on coal liquefaction is being implemented by Oil India Ltd (OIL) in Assam. Coal gassification is also being undertaken by Reliance Industries in collaboration with government of Gujarat.
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