Reliance Industries Plans ₹2.73 Lakh Crore Underground Coal Gasification Project in Andhra Pradesh

Reliance Industries has proposed a massive ₹2.73 lakh crore investment over 30 years to develop an integrated underground coal gasification complex in Eluru district of Andhra Pradesh, marking a major proposed project aimed at using deep coal reserves that are difficult to extract through conventional mining.

The project is planned in phases, with exploratory work and pilot testing expected to begin in late 2026. The initial exploration and pilot phase is estimated to require investment of up to ₹3,000 crore between the third quarter of 2026 and the fourth quarter of 2027.

Subject to the outcome of the pilot programme and commercial viability, Reliance Industries has proposed around ₹1.20 lakh crore for the development phase and another ₹1.50 lakh crore for the production phase. The phased structure means the larger investments would follow only after the initial technical and commercial assessments.

The project will focus on deep coal reserves in the Recherla and Chintalpudi Sector A1 coal blocks. These resources are located at depths of more than 600 metres and are considered unsuitable for conventional mining on economic and physical grounds.

Underground coal gasification converts coal into synthetic gas, or syngas, within the underground seam. The resulting gas can potentially be used as a feedstock for products such as urea, ammonia, methanol and synthetic fuels, creating opportunities to reduce dependence on imported feedstock.

The proposed project is also expected to have a regional employment impact. Reliance estimates that the development could generate between 3,000 and 5,000 direct jobs, along with 20,000 to 35,000 indirect and induced livelihood opportunities.

The proposal comes as India explores technologies to utilise its large coal reserves while supporting domestic energy and industrial requirements. The Ministry of Coal has been encouraging coal gasification as a way to unlock resources that remain difficult to access through conventional mining.

However, the project remains subject to the success of exploration and pilot testing, along with regulatory and environmental approvals. Technology performance, syngas yields, containment requirements and the economics of large-scale production will be important factors before the later investment phases move ahead.

For Reliance Industries, the proposed project represents a long-term opportunity to develop a new domestic source of synthetic gas and potentially connect deep coal resources with downstream industrial applications. The initial pilot phase will therefore be closely watched as the company assesses the commercial potential of underground coal gasification in India.