NEW DELHI: On a specific recommendation by the Investment Commission headed by Ratan Tata, Prime Minister Manmohan Singh on Friday directed an inter-ministerial group in the Planning Commission to examine the feasibility of converting coal to liquid fuel and gas.

In a presentation to Dr Singh here, the Commission noted that coal to liquids (CTL) was a feasible proposition and should become an integral part of India's strategy for oil security. On his part, Dr. Singh suggested that a time-bound action plan be prepared in this regard for ensuring oil security.

According to an official release, the Investment Commission, in its presentation, sought to project that about five CTL projects could double India's proven oil reserves. The liquid fuel so produced would not only be petrol but also naphtha and LNG, it said.

India, the Commission argued, would have to import more than 90 per cent of its oil requirements in the future and as new oil finds were unlikely to reduce imports, there was a need for CTL projects to ensure oil security.

As for the CTL projects, the Commission noted that the low-grade coal in the country would not be a constraint and the converted liquid fuel and gas would be ultra clean. The project, it said, would require captive open cast coalmines with pit-head reserves of 1.3 billion tonnes of coal.

The Commission also pointed out that the CTL technology had proved successful in South Africa with a significant impact on its economy. It felt that a mechanism for Centre-State partnership would be essential for the success of such a project.

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