1. Coal gasification- An opportunity to meet chemical & Petrochemical demand
September 2018

2. MACRO PERSPECTIVE Increasing energy demand
Growing dependence on Imported Energy
MACRO PERSPECTIVE
Volatile Energy Prices disturbing fiscal maths
Regional development & employment growth
70% population looking for affordable energy
Wind/Solar tariff touching all time low of Rs.2.44/unit

3. India - 5th largest coal reserves
Proved reserve s in billion Tons
India has over 100 years of recoverable coal reserves at current consumption rate
Source : BP statistical review of world energy – 2018
The reserves are at the end of 2017
Ukraine is omitted because of abnormal R/P ratio

4. Coal Utilization Scenario - India
Coal production in : 730 Mn Tons
Import in : 213 million Tons
Targeted in (Likely revision) : 1 Billion tons
The largest consumer of coal is power sector (60%)
Due to the advent of Renewable power, CEA indicated that the country doesn’t need more coal based power addition till 2022
Target
Alternate utilization of coal needs to be explored for future targets of coal production
Taking a cue from China, India may utilize coal reserves for the production valuable fertilizer /chemicals
The dream of producing 1 billion tons can be achieved by adopting chemical/fertilizer production through coal gasification
Source: Indian coal ministry report

5. Price Advantage of Coal
Prices of various energy feedstocks at Coal Pithead In India (in $/MMBtu)
USGC Pet-coke
110 $/T
LNG
12.2 $/MMBtu
Indian coal
35 $/T
Crude Oil (YTD)
82 $/bbl
Coal offers energy at cheap price thereby offering maximum value addition
Petcoke GCV – 8300 kcal/kg (Argus report)
LNG- Formula Linkage to 3 months brent crude average (76$/bbl)
Indian coal – 4000 kcal/kg & CIL Notified Price
Crude Oil(Brent) – 10,880 kcal/kg, YTD – Average year to date

6. China’s reliance on Gasification
Product
Production in 2015, Mt
Methanol 34
LPG 4*
DME 12
Olefin
Ethylene glycol
1.7
Oil products
2.4
Urea 60
Sector-wise coal consumption
Coal to Poly-generation in China
China relies on gasification technology to meet Fertilizer, Energy and Petrochem needs.
Gasification based ammonia accounts for 79% of China’s total Ammonia output.
China is also fulfilling 80% (60 MMTPA) of its Urea production through gasification.
China clearly demonstrates the advantages of this technology for utilizing domestic energy sources to produce valuable chemicals & fertilizers.
Source: Sector wise coal consumption by Wison – China, Market share of Coal Gasification from Asia chem report 2015

7. China is leveraging coal resources to meet Energy, chemical and Petrochemical demands
Chinese NRDC plan boosted CTC / CTL production
Many CTL/CTC projects have been planned in response to the policy
Product
Production in 2015, Mt
Exp. production in 2020, Mt
Methanol 34 66
LPG 4* 5
DME 12 20
Olefin 15
Ethylene glycol
1.7
n/a
Oil products
2.4 30
Urea 60
Xinjiang CTL: 10mt/a MeOH: 5mt/a
Ningxia CTL: 11mt/a DME: 7mt/a 3
Inner Mongolia CTL: tbd MeOH: 10mt/a
Heilongjiang CTL: tbd MeOH: tbd 1 5
Jiangsu-Shandong CTL: tbd MeOH: tbd
Central China CTL: 6mt/a MeOH: tbd 2 4
Yuannan-Guizhou area CTL: 6mt/a MeOH: tbd 6 7
* - Planned in NRDC
Source: BCG ; Research papers and company analysis

8. Methanol Blending -China
China has started using methanol as a vehicle fuel with the advent of Coal to methanol plants.
China has significantly Increased blending of Methanol & its derivatives in fuels over the last few years which now stands at 21 MMTPA.
Methanol direct blending with Gasoline (8.5 MMTPA)
MTBE+MTG blending in gasoline
DME blending in LPG
Direct blending now stands at 8.5 MMTPA or 9% of transport fuel demand
While M15(Methanol-15%, Gasoline 85%) is the main methanol blend available in major cities and provinces. Other blends like M25, M30, M85 and M100 are also being used
M15 is sold commercially mainly in the coal-producing provinces such as Shanxi and Shaanxi
China has built 43 blending facilities with more than 100,000 tons blending capability each
Source: US EIA for Washington Methanol Policy Forum

9. India - Chemical & Petrochemicals imports trend (KTPA)
Source: Chemicals and Petrochemicals statistics 2017

10. India chemicals and petrochemicals segment is heavily dependent on Imports
India chemical and Petrochemical imports is one of the major contributor of Country’s trade deficit
Source: Chemicals and Petrochemicals statistics 2017

11. Meeting challenges through Gasification
Monetization of abundant coal reserves equivalent to >130 years of current consumption
As emission norms becoming more stringent - timely exploitation of country’s coal resources through environment friendly gasification technology
Creating Energy security through effective utilization of gasification industry – resulting in reduction of crude, chemical & Petchem imports
Gasification offers cleanest way of utilizing Coal - SOx and NOx emissions are minimal compared to any other coal usage
Proven technology with hundreds of reference plants.

12. Exploitation of coal for Indian Chemical demand
Key Chemicals
Demand gap by 2025
(MMTPA)
Coal required for chemical production (MMTPA)
Acetic acid
1.1 7
Methanol*
6.6 32
MEG
1.4 8
PVC
3.7 11
Poly-Olefins
7.0 87
DME*
2.3
4.8
Total
22.1
150
Coal to Chemicals sector could be frontrunner in utilisation of untapped coal reserves
Coal requirement calculation is based on Indian Coal of GCV 3300 Kcal/kg and 45% Ash. Demand supply gap taken from ICIS database.
*Assumed 15% of Methanol blending with petrol and 10% of DME blending with LPG will be by Govt.
38 MMSCMD of SNG would be generated through slipped methane (FBDB) along with above products

13. Revenue of coal to chemical clusters
Key Chemicals
Total capacity of three clusters (MMTPA)
Price ($/T)
Revenue generation
( Million USD)
Acetic acid
1.1
400
440
Methanol
6.6
350
2310
MEG
1.4
750
1068
PVC
3.7
1000
3663
Poly-Olefins
7.0
1100
7700
DME
2.3
420
945
SNG* 38 8
3485
Other by -products
4.2
310
1296
Total Revenue Generation
~21000
Coal to Chemicals can save import bill to the tune of 21 Billion USD per Annum
SNG - generation is in MMSCMD, Price is $ per MMBtu

14. Steps required to catalyse Coal gasification projects in India
Ensuring Feedstock Security:
Continuous and consistent quality coal supply from a single source to be ensured for Coal to Chemical projects.
Economical Feedstock Price:
Since Coal Gasification is a clean technology, GST Compensation cess (previously clean environment cess) may be waived off on coal used for gasification
Coal may be provided to coal to chemical projects at economical price similar to that of Power plants
Product price:
Notifying a viable Methanol price for petrol blending. Govt. may allow blending of indigenously produced methanol (with petrol) using domestic/imported coal
De-risking Capital Investment:
Since coal to chemical projects are capital intensive, Capital Subsidy may be provided from GST compensation cess (previously clean environment Cess) collected on coal.