IOC ties up with Sasol for first commercial coal-to-liquid project

14-Apr-06

As crude oil price escalate globally, the economical viability of a coal to liquid project that can produce crude at US $50 a barrel becomes more promising. Indian Oil Corporation (IOC) plans to set up India's first commercial coal-to-liquid (CTL) project under a technical tie-up with South African firm Sasol. The project is to produce 4 million tons of synthetic crude oil using 120-130 million tons of domestic and imported coal. The price of crude produced by this method will be around US$50 a barrel. This crude will be processed at IOC's refineries to produce premium fuels like the high quality gasoil (diesel), LPG and naphtha (with high paraffinic qualities) that is best suited as a superior feedstock for crackers/naphtha based petrochemical projects. Post gasification, the resultant syngas could be converted to premium fuels by using Sasol's Fischer Tropsch (FT) synthesis technology. A typical minimum economic size capacity CTL plant would generate 2 million tonne per annum of gasoil and 0.5 mtpa of naphtha, which can be used as a supplement feedstock for liquid crackers in India. On the flip side, with domestic coal production pegged at 400 million tons and any increase in future production largely expected to be consumed by the power sector, the proposed liquefaction project would have to depend heavily on imports.