Gas
Reliance plans $4.6bn underground coal gasification project
Indian conglomerate Reliance Industries has outlined a multi-billion-dollar investment to convert underground coal into gas in Andhra Pradesh.
Key points
- Reliance Industries plans to invest approximately $4.57bn in an Andhra Pradesh underground coal-to-gas facility.
- The development is structured in two phases, starting with exploration and technical feasibility studies.
- India aims to expand its national coal gasification capacity to 100 million tonnes annually by 2030.
What happened
According to Offshore Technology, Indian multinational conglomerate Reliance Industries intends to invest roughly Rs430bn, equivalent to $4.57bn, in an underground coal gasification facility located in the southern Indian state of Andhra Pradesh. Reuters reviewed a government memorandum detailing the draft agreement between the company and the Andhra Pradesh Economic Development Board.
The initiative will proceed in two stages. An initial allocation of approximately Rs30bn will fund geological assessments, exploration work, and pilot studies. Subsequent development hinges on regulatory approvals and successful trials, requiring an additional investment of Rs400bn. If fully realised, the project could generate 5,000 direct jobs alongside 35,000 indirect positions, potentially drawing further investments reaching Rs2.7tn.
Strategic context
India's national authorities are actively promoting coal gasification technologies to curtail reliance on imported energy commodities. The government has established a target to achieve 100 million tonnes of annual coal gasification capacity by 2030. Existing operational and developing capacity currently stands at approximately 22.6 million tonnes.
Other domestic firms are also pursuing similar ventures. NTPC and Adani Enterprises have previously submitted applications for surface gasification projects under the National Coal Gasification Mission. Furthermore, the Indian administration introduced a Rs375bn incentive scheme in May 2026 to subsidise a portion of equipment expenses for surface coal and lignite gasification plants.
Why it matters
For energy markets globally, large-scale shifts toward synthetic gas production reflect ongoing sovereign efforts to secure domestic supply chains and reduce exposure to international fossil fuel price volatility. While Henry Hub gas spot prices stood at 3 US$ per MMBtu on 11 November 2026, according to US EIA data, major developing economies continue to explore domestic resource monetisation strategies to satisfy growing industrial demand. Policymakers and investors across Africa observe such state-backed industrial transitions closely, as resource-rich nations weigh domestic resource utilisation against export-oriented fossil fuel models amidst evolving global energy transitions.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
2.9% of electricity in India came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
