Reliance Industries Limited (RIL) has proposed investing about Rs 2.73 lakh crore over 30 years to develop an integrated Underground Coal Gasification (UCG) complex in Andhra Pradesh’s Eluru district. The investment will be subject to the project establishing commercial viability following exploration. The complex is planned at the Chintalapudi and Recherla coal blocks in coastal Andhra Pradesh. RIL recently secured the two blocks through an e-auction conducted by the Ministry of Coal.
Rs 2.73 Lakh Crore Investment Planned In Three Phases
Exploration activities are expected to begin in the current financial year, with the proposed investment divided into three phases. The exploration and pilot phase, scheduled from the third quarter of 2026 to the fourth quarter of 2027, could involve investment of up to Rs 3,000 crore. If exploration is successful, around Rs 1.20 lakh crore is proposed to be invested in the development phase between 2028 and 2030. A further Rs 1.50 lakh crore is planned for the production phase from 2030 onwards.
At steady-state operations, the project is estimated to create between 3,000 and 5,000 direct jobs and support another 20,000-35,000 indirect and induced livelihoods across the regional supply chain.
Project To Tap Deep-Seated Coal Resources
Underground Coal Gasification converts coal deposits underground into synthesis gas, or syngas, without physically extracting the coal through conventional mining. The technology can be used for deposits that are too deep or uneconomical to mine through traditional methods. India has around 360 billion tonnes of coal resources, of which approximately 160 billion tonnes are estimated to be too deep and economically unviable for conventional mining.
The Chintalapudi block spans around 3,000 acres and is estimated to contain 904.94 million tonnes of G-12 grade coal. The Recherla block covers around 5,500 acres and has an estimated 2,225.67 million tonnes of G-13 grade coal. Together, the two blocks contain an estimated 3,130.61 million tonnes of coal, with deposits located at depths exceeding 600 metres. The project could allow these deep-seated coal resources to be converted into syngas for use as an energy and chemical feedstock without conventional extraction.
Project Aligns With Coal Gasification Target
The proposed development is aligned with the National Coal Gasification Mission, which targets 100 million tonnes of coal gasification by 2030. Coal gasification is also being pursued as a way to use domestic coal resources to produce fuels and chemical feedstocks and reduce dependence on imported hydrocarbons. The project, however, remains contingent on the outcome of exploration and its subsequent commercial viability.