The two ADAG companies - Reliance Infrastructure (R-Infra) and Reliance Power (R-Power) - are in contention for the first of its kind coal liquefaction (coal to liquid fuel) project in Orissa.
While R-Power has submitted the bid in alliance with Syntroleum Corporation as its technical partner for all the three coal blocks, R-Infra has done the same in partnership with Rentech Inc, a source said.
Apart from this, both R-Infra and R-Power have tied up with German firm Siemens for gassification technology.
"Both R-Power and R-Infra are separate companies that qualify to bid for the project, and there is no harm in participating in a healthy competition," said a spokesperson for the companies.
Asked whether the attempts of the two firms to foray into oil production would violate the non-competence agreement between the two Ambani brothers, the spokesperson said, "This does not come under the purview of that agreement, which was signed years ago. Coal to liquid business is a new concept in India and such a business did not exist at the time of the split."
The bid norms mandate a minimum net worth of Rs 4,000 crore (Rs 40 billion) and collaborations with proven technology providers to qualify for bidding for the project.
Further, a bank guarantee of Rs 300 crore (Rs 3 billion) per block needs to be provided within three months of getting the block.
"Both R-Infra and R-Power have tied up with proven technology providers of Fischer Tropsch (FT), one of the best available technologies in this field," said the spokesperson, adding that both are banking on the expertise of Siemens for the gassification technology.
While Rentech has projected an investment of $10 billion for the coal to liquid project, R-Power's partner Syntroleum projects only $8.6 billion for a plant capacity of 80,000 barrels per day.
While Rentech projected an investment of $ 1.46 billion for the power plant, Syntroleum projected only $0.50 billion.
The Ministry of Coal had invited applications to allocate three coal blocks in Talcher Coalfield in Orissa for the specific purpose of coal liquefaction.
The coal reserve for liquefaction purpose ranges from 1 to 1.5 billion tonnes for each block, with about 30 million tonnes of coal available every year for about 30 years.
The project is to convert coal into other fuels such as kerosene, naphtha, diesel and petrol.
Sources said about 21 players are in the fray for the project. The last date for submission of the bids was July 21. Leading power and oil players, such as Reliance Industries, Tata Group, GMR, Indiabulls, Videocon Industries, Gujarat State Petronet, JSW Group and Indian Oil Corporation, are believed to be in the race for the project.
