The Hindu : International : CIL pursuing extracting oil through coal liquefaction

Online edition of India's National Newspaper
Friday, Aug 26, 2005

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CIL pursuing extracting oil through coal liquefaction

Indrani Dutta

Joint task force likely to formulate a roadmap for joint ventures

KOLKATA: At a time when the burgeoning price of crude oil is becoming a cause for concern, a new possibility of extracting oil through coal liquefaction has emerged with prices being pegged at a far lower level.

According to indication given by Oil India Ltd (OIL), the cost of extraction of oil by hydrogenation of coal has been pegged at about $40 a barrel. This was disclosed by sources at Coal India, which is seriously pursuing this new initiative.

OIL is keen to partner the CIL venture to produce oil from its coalfields in Assam and has studied this coal.

Sources said that following a senior-level meeting between CIL and OIL to discuss future possibilities, it has been decided to set up a joint task force comprising CIL and OIL. The task force is likely to formulate a roadmap for the formation of two joint ventures, one for coal production and the other for setting up a commercially viable coal-liquefaction project.

CIL sources said that while its unit, North Eastern Coalfield (NEC), would supply coal, an output of at about 3.5 million tonnes annually would be needed.

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