Reliance proposes ₹2.73 lakh crore coal-gasification project in Andhra Pradesh
Reliance Industries has proposed a 30-year underground coal-gasification complex, subject to exploration and commercial viability. The project could create domestic syngas feedstock for its refining and petrochemical operations and materially shape group-level capital allocation from 2026 onward.
What happened
Reliance Industries has proposed a Rs 2.73 lakh crore underground coal-gasification complex in Andhra Pradesh. The 30-year project, pending exploration results,
Key facts
- Rs 2.73 lakh crore proposed investment over 30 years
- Up to Rs 3,000 crore for exploration and pilot work
- Rs 1.2 lakh crore proposed development spending during 2028-30
- Rs 1.5 lakh crore proposed production-phase spending from 2030
- 3.13 billion tonnes estimated coal resource
- Chintalapudi block: 3,000 acres and 904.94 million tonnes of coal
- Recherla block: 5,500 acres and 2,225.67 million tonnes of coal
Why this matters
The project could deepen Reliance’s vertical integration into refinery and petrochemical feedstocks, but its strategic value remains contingent on resource validation, approvals and economics.
What to watch
- Formal state or central approvals for exploration, mining, environment, water use and gas commercialization
- A board-approved pilot, FEED contract, EPC award or disclosed initial capital tranche
- Resource-quality data and commercial-viability confirmation from exploration
- Reliance guidance indicating a reduction, delay or reprioritization of retail store expansion, consumer-brand investment or retail acquisitions
- Changes in Indian coal-gasification incentives, carbon rules, emissions standards or gas-pricing policy
- Evidence of external project financing, strategic partners or government support that limits balance-sheet pressure
- Watch for Andhra Pradesh government MoUs, land allocation, exploration licenses and a defined pilot or feasibility-study timetable.
- Track Reliance disclosures for project capex phasing, expected syngas output, funding structure and whether spending sits in standalone RIL or a dedicated subsidiary/JV.
- Assess environmental-clearance filings for water demand, carbon-management plans, underground gasification technology and local community conditions.
- Monitor management commentary on 2026-2030 capital-allocation priorities across oil-to-chemicals, new energy, telecom and retail.
- Compare projected syngas economics against LNG, domestic coal, imported feedstocks and carbon-compliance costs.