Reliance Industries Ltd. proposed an investment of ₹2.73 lakh crore to develop what could become India’s first integrated underground coal gasification (UCG) complex in Andhra Pradesh. The proposed project will focus on coal blocks in Eluru district, which RIL acquired through government e-auctions. The company plans to use underground coal gasification technology to access deep coal reserves that may be difficult or uneconomical to recover using conventional mining methods.
Underground Coal Gasification to Unlock Deep Coal Reserves
UCG converts coal into synthesis gas (syngas) underground, eliminating the need to extract the coal through conventional mining before processing it. The resulting syngas can serve as a feedstock for several industrial applications, including fertilisers, chemicals and other downstream products. By adopting UCG technology, RIL aims to unlock previously difficult-to-access coal resources while creating opportunities for integrated industrial development.
RIL to Begin with Exploration and Pilot Testing
Although the proposed investment will span approximately 30 years, RIL plans to develop the project in phases. The company expects to initially invest up to ₹3,000 crore between Q3 2026 and Q4 2027. This initial phase will focus on exploration and pilot-scale testing. These activities will help RIL evaluate the geological conditions of the coal blocks, assess UCG technology performance and determine the project’s commercial viability. Based on the results, the company could subsequently move towards larger-scale development and investment.
Project Could Create Downstream Industrial Opportunities
Beyond coal gasification, the proposed complex could support the development of downstream industries in Andhra Pradesh and strengthen domestic industrial supply chains. The availability of locally produced syngas could provide feedstock for fertiliser, chemical and other industrial applications, potentially reducing dependence on imported raw materials. The project could create an integrated industrial ecosystem around underground coal gasification while adding value to India’s domestic coal resources.
Phased Approach to Assess Commercial Viability
Reliance’s initial focus on exploration and pilot testing reflects a phased approach to a large and technically complex project. By evaluating geological conditions and technology performance before committing to full-scale development, the company can assess the project’s technical and economic feasibility and refine its plans accordingly. As reported by projectstoday.ai, if successfully developed, the proposed UCG complex could mark a significant step in India’s efforts to utilise deep coal reserves and develop alternative sources of industrial feedstock.
