India’s Reliance plans $4.6bn coal gasification project in Andhra Pradesh
India's Reliance Industries plans to invest about 430-billion rupees ($4.59-billion) in a plant to convert underground coal into gas in the southern Indian state of Andhra Pradesh, a government document seen by Reuters on Thursday showed.
The two-phase project could eventually draw up to 2.7-trillion rupees in investment and create about 5 000 direct and 3 000 indirect jobs, the draft memorandum of understanding dated November 12 between Reliance and the Andhra Pradesh Economic Development Board, showed.
If completed, it would be among India’s largest such projects. State-run NTPC and Adani Enterprises also applied for similar projects under a government incentive scheme earlier this year.
Reliance did not immediately respond to a Reuters request for comment.
India has been pushing coal gasification to reduce its reliance on imported fuels and chemicals, targeting annual coal gasification capacity of 100-million tonnes by 2030, according to the coal ministry.
India announced a 375-billion rupee programme in May to cover up to 20% of plant and machinery costs, aiming to cut natural gas imports for fertiliser production by tapping its vast coal reserves.
INVESTMENTS IN THE STATE
The project adds to a wave of investments in the State of Andhra Pradesh, where Google has committed $15-billion to build an AI hub and Reliance and its joint venture partners plan to invest $11-billion in data centre capacity.
South Korean carmaker Kia’s Indian unit on Thursday also announced plans to invest a combined $2-billion in an additional manufacturing plant in the State.
Reliance already operates a plant at its Jamnagar refinery in western India that converts petroleum coke, a refining byproduct, into gas to meet its energy needs and reduce dependence on imported liquefied natural gas.
Reliance intends to invest about 30-billion rupees in the first phase of the Andhra Pradesh project, covering exploration, geological studies and pilot demonstrations to assess its technical and commercial feasibility, according to the draft agreement.
The second phase, requiring an initial 400-billion rupees, would begin after successful trials and regulatory approvals, the document showed.
Reliance secured the Chintalpudi Sector A1 and Recherla coal blocks in Andhra Pradesh’s Eluru district in April under India’s first commercial coal mine auctions allowing underground conversion of coal into gas.