Reliance Industries Ltd. (RIL) has entered into a memorandum of understanding (MoU) with the Andhra Pradesh government to develop an integrated underground coal gasification (UCG) project, with an initial investment commitment of ₹43,000 crore over the next two years.
The project has an estimated total investment potential of ₹2.73 lakh crore and is proposed to be developed in phases by 2030. The facility is planned at the Chintalapudi Sector A1 and Recherla coal blocks in Eluru district, which Reliance secured through an auction conducted by the Ministry of Coal.
The proposed project is expected to generate around 5,000 direct jobs and 35,000 indirect employment opportunities, supporting industrial development and economic activity in the state.
The initial phase will involve an investment of approximately ₹3,000 crore for exploration, geological evaluation, pilot demonstrations and feasibility studies. During this stage, the company will assess the project’s technical performance, safety requirements, environmental safeguards and commercial viability.
The findings will help determine the project’s scope, site requirements and supporting infrastructure needs. They will also inform the preparation of a detailed project report (DPR) and investment decisions for subsequent phases.
Underground coal gasification converts coal deposits located deep beneath the earth’s surface into usable gas without requiring conventional extraction and surface processing of the coal. The gas produced can potentially serve as an energy source or industrial feedstock.
The next phase is expected to involve an investment of approximately ₹40,000 crore, subject to successful pilot trials, completion of feasibility assessments and the necessary regulatory approvals.
The proposed development aligns with India’s broader efforts to expand domestic coal gasification, strengthen energy security and reduce dependence on imported fuels and industrial feedstocks. Its implementation will depend on technical assessments, environmental and safety considerations, and the project’s demonstrated commercial feasibility.
