Reliance Plans $4.6 Billion Coal Gasification Complex in Andhra Pradesh

Reliance Industries plans to invest about 430 billion rupees, or $4.59 billion, to build an integrated underground coal gasification complex in Andhra Pradesh, according to a government document seen by Reuters. The plan runs in two phases over 30 years. It is a proposal set out in a document, not a built plant and not a final investment decision.

Reliance did not immediately respond to a Reuters request for comment. CNBC-TV18 reported separately that Reliance will sign a memorandum of understanding with the Andhra Pradesh government to develop the complex. That second report matches the Reuters document on the scale and the location of the project.

Two phases, with a test first

Phase one is the smaller step. It covers about 30 billion rupees for exploration, geological assessments and pilot demonstrations. Its job is plain: establish whether the project works on technical grounds and whether it makes commercial sense.

Phase two is much larger. It involves an initial investment of about 400 billion rupees. It will proceed only after phase one is completed successfully and after the necessary regulatory approvals are received, according to the document. Readers should hold that condition in mind. The large figure depends on results and approvals that have not yet happened.

The project would use underground gasification technology to turn deep coal reserves into usable gas without conventional mining. That method is the reason the first phase is a test. Deep reserves are harder to judge from the surface, and pilot work has to show what the coal can yield before a full build can be priced with confidence.

Jobs, blocks and state support

The document says the project could eventually attract investments of up to 2.7 trillion rupees over its lifetime. It could generate around 5,000 direct jobs and 35,000 indirect jobs, according to the same document. Those are lifetime figures tied to the full project, not jobs that exist today.

CNBC-TV18 reported that Reliance was awarded the Chintalpudi Sector A1 and Recherla coal blocks in the Eluru district by the Union coal ministry. It also reported that the Andhra Pradesh Economic Development Board will act as the nodal facilitation agency. In that role the board would assist Reliance with coordination across departments on access to land, water and power, and would liaise with central ministries.

A busy week for Andhra Pradesh

Reuters placed the proposal in a wider wave of investment in the state. Google has committed $15 billion for an AI hub in Andhra Pradesh. Reliance and its joint venture partners plan $11 billion in data centre capacity there. Kia India announced a $2 billion plant in the state on the same day.

That context helps explain why a state agency role is part of the plan. Land, water, power and central approvals have to move together for a project of this size. It does not change the test set out in the document itself. Phase one has to prove the idea first, and phase two has to clear its approvals, before the larger investment follows.