NLC India is in the process of establishing a lignite-to-methanol plant with an investment of ₹4,350 crore. The methanol facility aims to produce 4,00,000 tons of methanol, utilising 2.5 million tons of lignite. The government has pledged ₹600 crore in viability gap funding for the project. Air Products, USA is the technology partner for the project, while Engineers India Ltd (EIL) is overseeing the project management.
The lignite-to-methanol process involves gasifying lignite into synthesis gas (syn gas) by combining pulverized lignite with an oxidant like oxygen or steam. The resulting syn gas, at a high temperature of approximately 1,800 degrees Celsius, consists of carbon monoxide and hydrogen and serves as a precursor for various chemicals, including methanol.
The project is divided into two phases: lignite to syn gas and syn gas to methanol. NLC has issued separate tenders for these project components. The government is planning to establish 100 million tons of coal or lignite gasification plants by 2030. As reported by businessline, currently, five projects are in progress, including the Talcher project (a joint venture of Coal India, RCF, GAIL, and FCIL), as well as initiatives by Eastern Coalfields, Western Coalfields, Mahanandi Coalfields, and NLC.
