Indian conglomerate Reliance Industries Limited (RIL) is planning to invest approximately $4.6 billion (430 billion rupees) in an underground coal gasification complex project in Andhra Pradesh, India. The proposed development, which will be implemented in two phases, is expected to unlock deep underground coal reserves and convert them into usable gas without conventional coal mining.

According to a government document reviewed by Reuters, the project could eventually attract investments of up to 2.7 trillion rupees over its lifetime and generate approximately 40,000 direct and indirect jobs.

What is the Reliance Industries Underground Coal Gasification Project?

The proposed Reliance Industries project will use underground coal gasification (UCG) technology to convert coal deposits located deep underground into usable gas.

Unlike conventional coal mining, which involves extracting coal and transporting it to surface facilities for processing, underground coal gasification converts coal into gas within the underground coal seam itself.

The process involves injecting controlled amounts of oxygen or air and other suitable gasification agents into the coal seam. The gases then start chemical reactions that produce a combustible gas mixture. The resulting gas can subsequently be brought to the surface for processing and potential industrial applications.

Additionally, the proposed underground coal gasification plant is associated with Reliance’s Chintalpudi Sector A1 and Recherla coal blocks in Andhra Pradesh’s Eluru district. The company secured these through India’s commercial coal mining allocation process.

The development is expected to progress through exploration, geological assessment and pilot demonstrations before any large-scale commercial development can proceed.

Reliance Industries Underground Coal Gasification Project to Be Developed in Two Phases

Reliance Industries intends to build the proposed underground coal gasification complex in two phases.

The first phase is estimated to cost approximately 30 billion rupees ($320 million). It will focus on exploration, geological assessments and pilot demonstrations. These are intended to establish the technical and commercial feasibility of underground coal gasification at the proposed site.

The initial investigations will be particularly important in determining the suitability of the underground coal deposits. They will also help determine the technical requirements for gasification and the commercial viability of the proposed development.

The second phase is expected to involve an initial investment of approximately 400 billion rupees ($4.27 billion). However, its implementation will depend on the successful completion of the first phase and the acquisition of the necessary regulatory approvals.

Combined, the two phases represent an estimated investment of approximately 430 billion rupees, equivalent to $4.59 billion.

Beyond the initial investment, the proposed development could also attract up to 2.7 trillion rupees in cumulative investments over its lifetime.

Chintalpudi and Recherla Coal Blocks to Support the Development

The proposed development builds on Reliance Industries’ acquisition of the Chintalpudi Sector A1 and Recherla coal blocks in Andhra Pradesh.

The Indian Ministry of Coal confirmed in April 2026 that Reliance Industries had secured the two blocks under the country’s 14th round of commercial coal mine auctions. The tenders also included provisions for underground coal gasification.

The allocation also provides the resource foundation for Reliance’s proposed development, although the extent to which the coal deposits can support commercially viable underground gasification will depend on further geological investigations and pilot operations.

The two coal blocks are located in Eluru district. This makes the proposed development an important potential addition to Andhra Pradesh’s industrial and energy infrastructure.

The use of underground gasification could also provide an alternative approach to exploiting coal deposits that may be challenging to recover through conventional mining methods.

However, successful implementation will depend on geological conditions, gas recovery efficiency, environmental safeguards and the ability to develop commercially viable gas processing infrastructure.

Reliance Industries’ Andhra Pradesh Investment Expected to Create 40,000 Jobs

Beyond its energy infrastructure ambitions, the proposed underground coal gasification complex is expected to generate significant employment opportunities in Andhra Pradesh.

The government estimates that the development could create approximately 5,000 direct jobs and 35,000 indirect jobs.

Furthermore, the employment opportunities are expected to extend beyond the gasification facilities themselves. They will potentially support engineering, construction, geological exploration, equipment manufacturing and logistics services.

The project could also generate opportunities for contractors and suppliers involved in drilling, underground gasification systems, gas processing equipment, pipeline infrastructure, instrumentation and control systems.

Nevertheless, the projected wider economic benefits will depend on the project’s eventual scale and successful progression into commercial development.

Andhra Pradesh Attracts Major Industrial and Infrastructure Investments

Reliance’s proposed coal gasification complex comes amid a growing wave of major investments in Andhra Pradesh.

Google has committed approximately $15 billion towards developing an artificial intelligence hub in the state, while Reliance and its joint venture partners are planning an additional $11 billion investment in data center capacity.

Kia India has also announced plans to invest approximately $2 billion in a second automotive manufacturing plant in Andhra Pradesh, targeting production start in early 2030.

India’s CleanMax is also planning a $5.3 billion renewable energy project comprising of solar, wind and pumped hydro storage to supply electricity to a new 2GW AI facility in Andhra Pradesh.

These developments highlight the state’s efforts to attract large-scale industrial investment and strengthen its position as a destination for manufacturing, energy and digital infrastructure projects.

For Reliance, the coal gasification proposal also represents an opportunity to expand its involvement in India’s domestic energy and industrial feedstock supply chain.

What Next for the $4.6 Billion Reliance Coal Gasification Project in India?

The immediate priority for Reliance Industries will be to establish the technical and commercial viability of underground coal gasification at the proposed development sites.

The initial investment phase will therefore be critical.Exploration, geological assessments and pilot demonstrations are expected to determine whether the company can proceed with the much larger second phase.

Regulatory approvals will also be necessary before the project can advance into large-scale development.

Other important milestones will include the preparation of detailed engineering plans and identification of the gasification technology and equipment suppliers. The development of gas processing facilities will then follow.

Environmental considerations will also be central to the project’s development. Underground coal gasification requires careful management of groundwater, subsurface integrity, gas containment and potential contamination risks. These issues will need to be addressed through appropriate environmental assessments, monitoring systems and regulatory oversight.

Reliance Industries has not yet publicly disclosed a complete construction schedule, appointed engineering and construction contractors or confirmed the final commercial configuration of the proposed complex.

If the initial investigations and pilot demonstrations establish commercial feasibility, the development could become a major underground coal gasification investment in India. It will potentially make use of substantial coal resources while creating new opportunities for industrial infrastructure development in Andhra Pradesh.