Steel giant Jindal Steel and Power ltd (JSPl) is planning to commission its ambitious coal-to-liquid (CTl) project by 2019 and is negotiating with two to three European and US entities for a technological tie-up in the $10 billion venture.
JSPl Managing Director and Chief Executive Ravi Uppal has said that the tie-up would be made public within three to four months. He further added that Conocophilips, KPR, UDHE and GE among others are some of the companies with which they have held advance level discussions.
The potential partner would be finalised from among these through shortlisting, Uppal added.
JSPl had been allotted Ramchandi coal block in Odisha a few years back for executing the CTl project, which would be the first of its kind in the country. However work on developing this block has not begun as the necessary environmental and regulatory clearances are pending.
Under CTl, coal is processed to produce by-products and fuels like methanol, ethanol, petrol as well as diesel. Though the technology is being used for the first time in India, it is quite prevalent in South Africa, China and the US.
South African company Sasol – a synthetics and fuel major has been converting natural gas to produce various forms of fuels using CTl. In fact the Tata Group had tried starting a similar CTl venture in partnership with Sasol, however it is yet to take off, thus making JSPl the first company to begin such a project.
Regarding the funding of the CTl project, JSPl Chief Executive for Steel Business V R Sharma said that they are aiming to achieve a turnover to the tune of Rs 5,000 crore by 2015 as several of their projects would be streamlined by that time.
Meanwhile JSPl also announced that it would be spending Rs 14,000 crore by 2015 to expand its upcoming 6 million tonnes steel plant in Angul. Currently the capacity of the plant is 1.5 million tonnes.
Sharma said that during the first phase of the plant’s expansion, the company would also be setting up a 810 mw captive power generation unit.
Till now the company has spent Rs16,000 crore on the plant and has taken a debt of Rs 9,000 crore to begin work at the unit.
The company targets to export steel manufactured from Angul, which is nearly 210 km from Paradeep port.
The Rs30,000 crore project would source coal from captive coal block Utkal-B1, which is nearly 7km from the site of the steel mill.
"We are waiting for the mining lease for the block. As soon as we get this, we would start removing the over burden," Sharma told mediapersons visiting the project.
Till now, JSPl has spend Rs 16,000 crore for the steel and power project to be spread across 4,000 acres.
The company is maintaining a debt to equity ratio of 1.65:1. It has raised loans both from the domestic and overseas market.
The company has got physical possession of 2,600 acres and payments have been made for complete 4,000 acres.
The complete land is likely to be acquired by July-August 2013, Sharma said.
JSPl has commissioned 405 mw of power capacity out of total 840 megawatts planned at the integrated steel and power plant in Angul.
The last unit of the power plant would be completed by August 2013, he added.