Sasol, Tata plan CTL plant

Johannesburg - Indian conglomerate the Tata Group and Sasol [JSE:SOL], the world's largest fuel from coal producer, have approached the Orissa government to set up their coal-to-liquid (CTL) fuel facility in the state with an investment of $10bn.

According to business media in India, the proposal was presented by Tata Steel vice-chairperson Balasubramanian Muthuraman and Sasol Synfuel International managing director Ernst Oberholster during their meeting with Orrisa's chief minister Naveen Patnaik at the state secretariat on Monday to discuss the project.

The companies formed a joint venture two years ago with a view to building India's first CTL plant but the project has yet to find a suitable location.

Key among the considerations that have to be taken into account when selecting a location is access to coal.

The proposed plant is seen as helping India meet its growing fuel requirements.

While presenting the matter, the joint venture company urged the state government to provide adequate facilities for early commissioning of the project.

The project, which is targeting commission in 2018, would produce 80 000 barrel of liquid fuel per day.

India's Financial Express reported that the project would generate employment, both direct and indirect, for 35 000 people.

Other media, including the Business Standard, noted that the project would need 3 000 acres of land for the proposed plant and 24 million gallons water per day.

Additional land would also be required for setting up coal mine, beneficiation plant, coal handling plant, water reservoir, power plant and township.

The coal-to-liquid fuel project, which would require about 28 to 31 million tonnes of coal per annum, would source the coal from Arakhpal and Srirampur mines of the Talcher coal belt.

Besides generating 1 600MW of power, the plant will produce diesel, naptha and liquid petroleum gas.

The by-products will be tar, phenol, sulphur, ammonium, fertiliser and mining explosives.

Aside from India, Sasol also plans to establish CTL plants in China.

At 09:52 shares in Sasol were trading 8 cents up at 300.28 rand on the JSE.

- I-Net Bridge