RIL proposes Rs 2.73 lakh crore investment for India’s first coal gasification complex in Andhra

New Delhi: Reliance Industries Limited (RIL) has proposed to invest about ₹2.73 lakh crore over 30 years to develop India's first integrated Underground Coal Gasification complex in Eluru district of Andhra Pradesh, subject to commercial viability post exploration.

The complex will be developed at the Chintalapudi and Recherla blocks in coastal Andhra Pradesh. The company recently secured the two coal blocks through an e-auction conducted by the coal ministry.

The initial proposal of the company has pegged the potential investment at ₹2.73 lakh crore across the entire project life of 30 years. RIL will begin exploration activities in the current fiscal. The investment is proposed to be done in three phases. The exploration and pilot phase (from Q3 of 2026 to Q4 of 2027) will see an investment of upto ₹3,000 crore.

According to the company's proposal submitted to the state government, which ET has seen, if the exploration is successful, RIL will invest ₹1,20,000 crore in the development phase from 2028-30 and ₹1,50,000 crore in the production phase from 2030 onwards. As per company estimates, the project is expected to create 3,000-5,000 direct jobs at steady-state operations and 20,000-35,000 indirect and induced livelihoods across the regional supply chain.

Underground Coal Gasification (UCG) is an in-situ process that converts deep-seated coal which is too deep and uneconomical for conventional mining, into usable synthesis gas (syngas) without physically extracting the coal. India has a vast coal resource of about 360 billion tonnes, with almost half of this (about 160 billion tonnes) too deep and economically unviable for conventional mining.

UCG can convert AP's deep, otherwise stranded coal resources-over 1 billion tonnes across these two blocks alone-into a durable source of energy, chemicals and revenue for the State, without the land disturbance, displacement or underground manpower risk associated with conventional mining.

RIL did not respond to an email requesting comment.

The Chintalapudi coal block, which is spread across 3,000 acres, is estimated to contain 904.94 million tonnes of G-12 grade coal. The Recherla block, covering 5,500 acres, holds an estimated 2,225.67 million tonnes of G-13 grade coal. Together, the two mines are estimated to contain 3,130.61 million tonnes of coal reserves. Officials said the coal deposits lie at depths of more than 600 metres.

The project is in sync with National Coal Gasification Mission's objective of 100 MT of coal gasification by 2030. UCG will help in reducing India's dependence on crude imports, which expose the economy to price volatility, currency movement, external supply shocks and geopolitical and maritime disruptions like closure of Strait of Hormuz.