Reliance Industries to Start Underground Coal Gasification Exploration in Andhra Pradesh

Reliance Industries Ltd (RIL) is set to enter the underground coal gasification (UCG) map as it begins exploration activity in the Eluru District of Andhra Pradesh starting January. The development follows commercial coal mine bidding rounds conducted by the Ministry of Coal earlier in the year.

The company aims to complete its pilot project by mid-2028, running exploration and pilot work simultaneously. UCG is an approach to coal utilization that converts coal directly into synthetic gas within the underground seam, eliminating the need for conventional surface mining.

The project will utilize coal resources from the Chintalapudi and Recherla blocks. Operations will not begin simultaneously across both blocks, with activity starting initially in the Chintalapudi block. RIL secured the Recherla and Chintalapudi Sector A1 mines under India's first-ever tranche of commercial coal mines featuring embedded provisions for UCG, following production and development agreements executed by the Ministry of Coal in April 2026.

The entire project will be implemented in three distinct phases. It starts with an initial investment of up to ₹3,000 crore during the exploration and pilot phase. Further investment proposals will be worked out based on the pilot results and commercial viability.

While coal has not traditionally been a primary focus in the conglomerate's portfolio, the strategic shift is driven by a mandate to secure cheap energy and develop new industrial hubs on the east coast. RIL plans to leverage its existing experience in oil, gas exploration, and coalbed methane for this segment.

To execute the project, RIL plans to deploy the Controlled Retracting Injection Point (CRIP) gasification technology and has outlined solutions for resource and grid integration. To meet heavy water requirements without straining local sources, the company will set up a desalination plant at Machilipatnam in the Krishna District. For power infrastructure, RIL will initially purchase electricity from the State grid to run the pilot and subsequently build a dedicated captive power plant for full-scale production.

Although final pricing for the produced synthetic gas has not yet been determined, sources indicate that a competitive price structure will be targeted.

"Reliance Industries expanding into underground coal gasification demonstrates a strategic pivot toward securing localized and cost-effective energy resources at scale. By leveraging its core capabilities from the oil and gas sector and deploying advanced technologies like CRIP, large conglomerates are redefining domestic industrial infrastructure. For the broader business ecosystem, long-term capital investments in untried domestic segments such as UCG highlight the importance of aligning large-scale operations with evolving resource policies and regional integration." — Dr. Shishir Gupta, Founder & CEO, StartupLanes