Reliance Industries Ltd (RIL) is set to commence exploration activities in Eluru District, Andhra Pradesh by January 2026, marking India's entry into underground coal gasification (UCG) operations. According to reports from The Hindu BusinessLine, the company aims to complete its pilot project by mid-2028, running exploration and pilot work simultaneously. The project will tap into coal resources from the Chintalapudi and Recherla blocks, with activity starting in Chintalapudi first before expanding to Recherla. By definition, UCG is a revolutionary approach to coal utilisation that converts coal into synthetic gas in situ (directly within the underground seam) without the need for conventional surface mining.
The entire project will be implemented in three distinct phases, with an initial investment of up to ₹3,000 crore during the exploration and pilot phase. As reported by The Hindu BusinessLine, if the pilot delivers strong results and proves commercially viable, based on requirements, an investment proposal will be worked out. The strategic shift is driven by a clear mandate from the top to secure cheap energy and create new 'Jamnagars on the east coast'. While coal has not traditionally been prominent in the conglomerate's portfolio, RIL aims to leverage its extensive experience in oil and gas exploration, as well as coalbed methane, to conquer this unexplored segment.
RIL plans to deploy the Controlled Retracting Injection Point (CRIP) gasification technology to execute the project. According to The Hindu BusinessLine, the company has outlined solutions for resource and grid integration. To address heavy water requirements without straining local sources, RIL will set up a desalination plant at Machilipatnam in 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.
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. As reported by The Hindu BusinessLine, 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. 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.
