NLC India is developing a Rs 4,350 crore lignite-to-methanol plant in a strategic move towards sustainable energy production. When the plant starts methanol production, it will save Rs 1,000 crore worth of crude imports annually.

The upcoming plant  will produce 400,000 tonne of methanol using 2.5 million tonne of lignite. The project  is poised to make significant contributions to both the energy sector and the economy. NLC expects to receive Rs 600 crore viability gap funding from the government.

The USA-based Air Products is the technology partner for the project, and Government of India-owned Engineers India (EIL) is the project manager. In coal-to-methanol or lignite-to-methanol plants, coal or lignite is first gasified into synthesis gas (syngas) by mixing pulverised coal or lignite with an oxidant such as oxygen or steam.

As such, the process is divided into two parts – lignite to syngas and sy gas to methanol. NLC has floated two separate tenders for awarding the projects. The technical bids have been opened for the lignite to syngas package; three parties have submitted bids. The company anticipates being able to award the project by the end of January 2024.

For the syngas to methanol project, the last date to submit bids is 30 December, 2023. NLC expects work on the project to commence by March next year. Earlier, the company had won the North Dhadu coal block in Jharkhand through a commercial auction in August this, and has recently received the formal allotment order.

NLC, which planned to produce three mtpa of coal from the block, now seeks production to reach four to five mtpa.