Come January, Eluru District in Andhra Pradesh will become part of India’s underground coal gasification (UCG) map. Reliance Industries Ltd (RIL) is set to start exploration activity in the region. This follows the commercial coal mine bidding rounds called by the Ministry of Coal earlier this year.
The company aims to complete its pilot project by mid-2028, running exploration and pilot work simultaneously.
By definition, UCG is a revolutionary approach to coal utilisation. It converts coal into synthetic gas in situ (directly within the underground seam) without the need for conventional surface mining.
The UCG project will tap into coal resources from the Chintalapudi and Recherla blocks. Work in both blocks will not start simultaneously. The phase of activity will start in Chintalapudi.
The entire project will be implemented in three distinct phases, starting with an initial investment of up to ₹3,000 crore during the exploration and pilot phase. If the pilot delivers strong results and proves commercially viable, based on requirements, an investment proposal will be worked out, sources said.
While coal has not traditionally been prominent in the conglomerate’s portfolio, the strategic shift is driven by a clear mandate from the top: secure cheap energy and create new ‘Jamnagars on the east coast’, a source told businessline.
RIL’s flagship refinery-cum-petrochemical complex currently operates in the western part of India at Jamnagar. By venturing into UCG, RIL aims to leverage its extensive experience in oil and gas exploration, as well as coalbed methane, to conquer this unexplored segment.
The groundwork was laid in April 2026, when the Ministry of Coal executed production and development agreements with successful bidders for four coal mines under the 14th round of commercial auctions. This marked India’s first-ever tranche of commercial coal mines featuring embedded provisions for UCG, with RIL securing the Recherla and Chintalapudi Sector A1 mines.
To execute the project, RIL plans to deploy the Controlled Retracting Injection Point (CRIP) gasification technology. The company has also outlined solutions for resource and grid integration. To address the heavy water requirements without straining local sources, RIL will set up a desalination plant at Machilipatnam, a popular coastal gateway in the Krishna District.
For power infrastructure, the company will initially purchase electricity from the State grid to run the pilot, but will subsequently build a dedicated captive power plant once full-scale production begins.
While it is still early days to determine final pricing for the produced synthetic gas, sources indicate that a highly competitive price structure will be preferred.
Published on November 4, 2026
