RIL to Launch Underground Coal Gasification Project in Andhra Pradesh by 2028

Reliance Industries Limited (RIL) is preparing to make its entry into underground coal gasification (UCG) with a new project in Eluru District, Andhra Pradesh, expected to commence exploration activities in January 2027. This initiative marks a strategic expansion into coal-based energy, a sector that has not traditionally been a major focus for the conglomerate.

The move follows the Ministry of Coal’s recent commercial coal mine auctions, which included provisions for UCG technologies. RIL secured mining rights for the Chintalapudi and Recherla blocks during the 14th round of commercial coal mine bidding conducted earlier this year. The company plans to start operations first in the Chintalapudi block before extending activities to Recherla.

Underground coal gasification is an innovative approach where coal is converted into synthetic gas directly underground, eliminating the need for conventional mining. This method can unlock energy from coal seams that are otherwise difficult or uneconomical to mine. RIL’s pilot project aims to demonstrate the commercial viability of this technology in India’s eastern coalfields.

The project will unfold in three phases, beginning with an exploration and pilot phase funded by an initial investment estimated at up to ₹3,000 crore. Should the pilot phase prove successful, RIL intends to scale up operations, with additional investment plans to be developed based on project outcomes and energy demand.

RIL’s interest in UCG aligns with a broader goal to secure affordable energy sources and establish new industrial clusters along India’s east coast, similar to its existing Jamnagar refinery and petrochemical complex located on the west coast. A source familiar with the company’s strategy indicated that the objective is to replicate the scale and impact of Jamnagar in eastern India, thereby diversifying RIL’s energy portfolio.

Leveraging its extensive experience in oil and gas exploration and coalbed methane extraction, RIL is well-positioned to pioneer UCG technology in the region. The company plans to deploy Controlled Retracting Injection Point (CRIP) technology for gasification, which is designed to optimize underground coal conversion efficiency.

Addressing water resource challenges, RIL will construct a desalination plant at Machilipatnam in Krishna District to meet the project’s substantial water needs without burdening local freshwater supplies. For power requirements during the pilot, electricity will initially be sourced from the state grid, with plans to develop a dedicated captive power plant as the project advances to full-scale production.

While pricing for synthetic gas produced through UCG is yet to be finalized, company insiders suggest that the pricing strategy will aim to remain highly competitive within the energy market. This approach will be crucial for the project’s commercial success and its contribution to India’s energy mix.

This initiative represents a significant step for RIL as it explores new energy frontiers beyond its traditional refining and petrochemical operations. It also reflects the growing interest in alternative coal utilization technologies within India’s energy sector, which is seeking more efficient and environmentally considerate methods to harness domestic coal reserves.

The pilot project is targeted for completion by mid-2028, with exploration and development activities running concurrently. If successful, the Andhra Pradesh UCG project could serve as a blueprint for similar ventures across the country, potentially transforming how coal resources are exploited in India’s eastern regions.