Larsen & Toubro’s Energy Hydrocarbon division has won a significant contract to establish India’s first commercial coal-to-ammonium nitrate facility in Odisha. The project is being developed by Bharat Coal Gasification and Chemicals Limited, a strategic joint venture between public sector giants Coal India Limited and Bharat Heavy Electricals Limited. This initiative marks a major milestone in India’s National Coal Gasification Mission, aimed at reducing chemical imports and utilizing domestic coal for high-value industrial applications.
Details of the L&T Contract
The contract awarded to Larsen & Toubro (L&T) Energy Hydrocarbon Onshore is valued between ₹2,500 crore and ₹5,000 crore. This is a Lump Sum Turnkey (LSTK) agreement, which means L&T will be responsible for the entire lifecycle of the specific units, from basic design and detailed engineering to procurement, construction, and commissioning. Specifically, L&T will develop the Nitric Acid and Ammonium Nitrate units of the project, which are part of ‘Package-4’ of the overall facility development.
Understanding the Coal-to-Ammonium Nitrate Project
Located in Lakhanpur, in the Jharsuguda district of Odisha, the project is situated on approximately 350 acres of land. This land has been leased from Mahanadi Coalfields Limited (MCL), a major subsidiary of Coal India Limited. The facility is strategically placed near coal mines to ensure a steady supply of raw materials for the gasification process.
Technology and Capacity
The project will utilize BHEL’s indigenous Pressurized Fluidized Bed Gasification (PFBG) technology. This technology is particularly well-suited for Indian coal, which typically has a high ash content. The plant is designed to produce 2,000 tonnes per day (TPD) of technical-grade ammonium nitrate, which translates to an annual production capacity of approximately 0.66 million tonnes. This makes it one of the largest commercial-scale coal-to-chemical plants in the country.
The Joint Venture: BCGCL
Bharat Coal Gasification and Chemicals Limited (BCGCL) is a joint venture company incorporated in May 2024. It was formed through a collaboration between two Maharatna Public Sector Enterprises to spearhead India’s coal-to-chemical transition. Coal India Limited (CIL) holds a majority 51% equity stake in the venture, while Bharat Heavy Electricals Limited (BHEL) holds the remaining 49% stake. The Ministry of Coal has provided financial support of approximately ₹1,350 crore for this project through a dedicated incentive scheme for coal gasification.
Strategic Importance of Ammonium Nitrate in India
Ammonium nitrate is a critical industrial chemical used primarily in the production of explosives for the mining, quarrying, and infrastructure sectors. It is the primary component of ANFO (Ammonium Nitrate Fuel Oil), which is extensively used for rock fragmentation and blasting operations. Given India’s massive coal and mineral extraction activities, a reliable and domestic supply of this chemical is essential for national industrial security.
Reducing Import Dependency
India currently relies heavily on imports to meet its domestic demand for technical-grade ammonium nitrate. Major suppliers include countries like Russia, Bulgaria, and Turkey. By establishing a local production facility with a capacity of 0.66 million tonnes per annum, this project aims to significantly reduce this dependency. This shift will not only conserve valuable foreign exchange but also ensure that the mining sector remains insulated from global supply chain disruptions.
National Coal Gasification Mission: The 2030 Vision
The BCGCL project is a cornerstone of India’s broader National Coal Gasification Mission, which has set an ambitious target to achieve 100 million tonnes of coal gasification capacity by 2030. Coal gasification is a process that converts coal into synthesis gas (syngas), which can then be used to produce electricity, hydrogen, or chemicals like methanol and ammonium nitrate. This mission is part of the Aatmanirbhar Bharat initiative, focusing on maximizing the value of India’s vast coal reserves while reducing the environmental impact of traditional coal usage.
Key Takeaways
- L&T Energy Hydrocarbon Onshore secured a major EPC contract valued between ₹2,500 crore and ₹5,000 crore for a coal-to-chemical project in Odisha.
- The project is a joint venture between Coal India Limited (51%) and Bharat Heavy Electricals Limited (49%), named Bharat Coal Gasification and Chemicals Limited (BCGCL).
- The facility, located in Lakhanpur, Odisha, is designed to produce 2,000 tonnes per day of technical-grade ammonium nitrate.
- It will utilize BHEL’s indigenous Pressurized Fluidized Bed Gasification (PFBG) technology, suitable for high-ash Indian coal.
- The project aligns with India’s National Coal Gasification Mission, which targets 100 million tonnes of capacity by 2030.
- The initiative aims to reduce dependence on ammonium nitrate imports from countries like Russia and Bulgaria, conserving foreign exchange.
