IndianOil eyes tie-up with S Africa co
New Delhi   26-Feb-2008
<b>Oil major looking for a partnership in Coal-To-Liquid project</b> Flagship refiner IndianOil Corporation has evinced interest in joining projects to synthesize automotive oil from coal being pursued by South African oil firm Sasol, particularly the one in India in joint venture with the Tata group. The state-owned company has expressed its wish to the external affairs ministry for flagging it to Pretoria during Pranab Mukherjee’s visit to that country. The Tata group has sought from the coal ministry access to 30 million tonnes of black diamond a year for producing 3 million barrels of oil and 1,500 mw of power from the proposed project with Sasol, a pioneer in the field. The Tata group has an understanding with Sasol, the world's largest producer of oil from coal, which is reported to be willing to pump in up to $6 billion in the project that will be the first of its kind in India. IndianOil executives said it was too premature to talk about a possible coal-to-liquid deal and things would depend on both Sasol and the Tatas. If it works out, it will be a first for IndianOil and could spur the refiner to also look at joining hands with Reliance Industries Ltd in a similar project. A partnership in CTL projects makes sense for the state-owned refiner as it will help it to cut imports and cut losses from selling fuels at artificially low prices set by the Government. A project of the size being proposed by the Tata-Sasol combine is projected to save over $25 billion to the exchequer by crude import substitution. The Mukesh Ambani-controlled Company has also sought coal acreages for feeding its proposed CTL project to synthesize 80,000 barrels a day of motor oil. Both Tata group and Reliance want the government to make CTL projects eligible for captive mining. Notifying the proposed CTL unit as an end-user can do this. The Tata-Sasol combine has sought allocation of coal acreages with a total of 1.5-2 billion tonnes of reserves that are to be dedicated to the project.