Indian government-owned firm Coal India Limited (CIL) has signed a joint venture (JV) agreement with three companies to set up a new coal gasification project in Talcher, Odisha state.

The project will entail a coal gasification-based fertiliser complex, along with a power plant and associated facilities.

In its filing to the Bombay Stock Exchange (BSE), the company stated, “Coal India Limited (CIL), GAIL (India) Limited, Rashtriya Chemical Fertilizers Limited (RCF) and Fertilizer Corporation of India Limited (FCL) have entered into a Joint Venture Agreement for incorporation of a company namely ‘Rashtriya Coal Gas Fertilizers’ to establish and operate new coal gasification-based Fertilizer Complex (Ammonia Urea Complex) at Talcher along with power plant and associated facilities at Talcher unit of FCIL and to market its products.”

GAIL will be primarily responsible for setting up the upstream coal gasification and gas purification section for the production of ammonia syngas for downstream fertiliser unit. RCF and Coal India will put up the other downstream plants of ammonia, urea, nitric acid and ammonium nitrate plants.

Construction work is expected to start at the end of this fiscal period of earlier, with the plant expected to be operational by 2019.

The $1.2bn project is of strategic importance for the country as it aims to make a breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources. As per available statistics, the total coal reserves in the country are around 300 billion tonnes, with recoverable reserves of 173 billion tonnes.

Coal gasification is a significant end-user sector for the industrial gases business.

A good example of this is China, where coal gasification is particularly significant. Over the last 10 years, most of the coal-fired power plants were built in China and are cited as providing almost all of the energy needed to fuel China’s extraordinary economic growth.

The gases industry has benefited from various coal gasification projects in China in recent years, with several plants coming on-stream in the country. Examples include six major air separation units (ASUs) that The Linde Group will make operational this year under contracts with businesses of the Shenhua Group, and Air Liquide’s complex of eight units – including an ASU of 2,000 tonnes of oxygen per day – to be commissioned at the beginning of 2016 in South-East of China.