Reliance Industries plans to invest ₹43,000 crore in an Andhra Pradesh coal-to-gas plant. According to a memorandum dated November 12, the project could generate 40,000 jobs. Reliance got coal blocks in April to start this work. This move aims to reduce India’s dependence on imported fuels using local coal reserves.
Reliance Industries plans to invest around ₹43,000 crore in a plant to convert underground coal into gas in Andhra Pradesh, adding to a series of large investment proposals in the southern state, Reuters reported.
The proposed project could eventually attract investments of up to ₹2.7 lakh crore and generate around 5,000 direct and 35,000 indirect jobs, according to the draft memorandum of understanding dated November 12 between Reliance and the Andhra Pradesh Economic Development Board.
The project will be developed in two phases. Reliance plans to invest around ₹3,000 crore in the first phase, which will cover exploration, geological studies and pilot demonstrations to assess the project's technical and commercial feasibility.
The second phase would require an initial investment of ₹40,000 crore and would begin after successful trials and the necessary regulatory approvals, the document showed.
Google has committed $15 billion to build an artificial intelligence hub in the state, while Reliance and its joint venture partners have plans to invest $11 billion in data centre capacity. South Korean automaker Kia's Indian unit also announced plans on Thursday to invest a combined $2 billion in an additional manufacturing plant in the state.
Reliance secured the Chintalpudi Sector A1 and Recherla coal blocks in Andhra Pradesh's Eluru district in April. These were awarded under India's first commercial coal mine auctions that allowed underground conversion of coal into gas.
If completed, the proposed facility would rank among India's largest coal-to-gas projects. State-run NTPC and Adani Enterprises have also applied for similar projects under a government incentive scheme earlier this year.
Why India is promoting coal gasification
India is encouraging coal gasification to reduce its dependence on imported fuels and chemicals. The coal ministry has set a target of achieving annual coal gasification capacity of 100 million tonnes by 2030.
In May, the government announced a ₹37,500-crore programme to cover up to 20% of the cost of plant and machinery for coal gasification projects. The initiative is aimed at reducing natural gas imports, particularly for fertiliser production, by using the country's large coal reserves.
Reliance already operates a facility at its Jamnagar refinery in Gujarat that converts petroleum coke, a byproduct of refining, into gas to meet its energy requirements and reduce dependence on imported liquefied natural gas.
The proposed Andhra Pradesh project would extend the company's gasification operations to underground coal resources.