Reliance Industries Ltd (RIL) is preparing to launch an underground coal gasification (UCG) pilot project in Andhra Pradesh’s Eluru district in January 2027. The company aims to complete the pilot by mid-2028 and plans to develop the project in three phases. The initiative could also support RIL’s broader strategy to establish new energy and industrial hubs along India’s eastern coast.
Exploration to Begin in Chintalapudi
The project will utilise coal resources from the Chintalapudi and Recherla blocks. RIL will initially begin exploration in Chintalapudi, followed by activities in Recherla. However, the company will phase development across the two blocks rather than start operations simultaneously.
Underground coal gasification converts coal into synthetic gas within underground coal seams, eliminating the need for conventional surface mining during the gasification process. For this project, RIL plans to deploy Controlled Retracting Injection Point (CRIP) technology. The company is working on arrangements to connect the project to the electricity grid and establish the supporting infrastructure required for the pilot.
₹3,000 Crore Investment for Pilot Phase
RIL expects to invest up to ₹3,000 crore in the initial exploration and pilot phase. The company intends to conduct exploration and pilot activities simultaneously, targeting completion by mid-2028. RIL will prepare a fresh investment proposal if the pilot demonstrates encouraging technical results and commercial viability. The subsequent investment will depend on the project’s performance and its potential for large-scale deployment.
RIL Secures Two Coal Blocks
The project follows the Ministry of Coal’s commercial mine bidding rounds and the execution of production and development agreements in April 2026. These agreements covered four coal mines awarded under the 14th round of commercial coal auctions. Notably, the auction included India’s first tranche of commercial coal mines with provisions for underground coal gasification. RIL secured the Recherla and Chintalapudi Sector A1 coal mines, providing the resource base for its proposed gasification initiative.
Desalination and Power Infrastructure Plans
The project will require substantial water and electricity supplies. To meet its water requirements without increasing pressure on local freshwater resources, RIL plans to establish a desalination plant at Machilipatnam in Krishna district. During the pilot phase, the company will procure electricity from the state grid. However, if the project progresses to full-scale commercial production, RIL plans to establish a dedicated captive power plant to meet its energy requirements.
Commercial Viability to Determine Expansion
The synthetic gas produced during the pilot does not yet have a final pricing structure. According to sources cited in the BusinessLine report, RIL prefers a highly competitive pricing model. However, the final commercial terms will depend on the pilot’s performance and the requirements of subsequent operations.
Part of RIL’s Eastern Coast Energy Strategy
The initiative builds on RIL’s existing experience in oil and gas exploration and coalbed methane production, extending its activities into underground coal gasification. The company also operates a major refinery and petrochemical complex at Jamnagar on India’s western coast.
The Andhra Pradesh project forms part of a broader internal strategy to develop new energy and industrial hubs along the eastern coast. The immediate priorities include commencing exploration at Chintalapudi, advancing pilot operations and evaluating the technology’s commercial potential. As reported by urbanacres.in, the pilot’s technical and economic performance will determine RIL’s next investment decision and the project’s transition towards full-scale production.
