Coal Gasification Project To Strengthen India's Energy Security: G Kishan Reddy

Union Coal and Mines Minister G Kishan Reddy on Saturday said the beginning of the coal gasification project marks a historic step towards converting India's abundant coal resources into value-added products, which will strengthen the country's energy security and promote import substitution.

Reddy said this after Prime Minister Narendra Modi virtually laid the foundation stone for the Rs 25,000 crore Coal-to-Ammonium Nitrate Project of Bharat Coal Gasification & Chemicals Limited (BCGCL) in a meeting at Rairangpur in the presence of President Droupadi Murmu.

The Union minister attended the meeting by physically remaining present at the project site in Lakhanpur in Jharsuguda district.

"The project is targeted for commissioning by September 2029," an official said.

Reddy, in a post on X, said: "The project will strengthen India's energy security, promote import substitution, reduce dependence on critical imported chemicals and feedstocks, generate employment opportunities, and support the vision of Aatmanirbhar Bharat through the cleaner and more efficient utilisation of domestic coal resources. The ammonia produced through this project will support fertiliser manufacturing, benefiting farmers and strengthening India's agricultural self-reliance through the efficient utilisation of domestic coal resources." The Union Coal and Mines minister told reporters at the project site that "This joint venture between Coal India Ltd and BHEL marks the beginning of a new era of coal processing in the country, which will promote indigenous coal gasification technology and facilitate the conversion of India's abundant coal resources into value-added chemicals." He said the project is expected to generate significant employment for regional youth, promote skill development, and drive regional economic growth through the development of ancillary industries and services.

BCGCL is a joint venture company formed between Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL), with CIL holding 51 per cent equity and BHEL holding 49 per cent equity.

Mahanadi Coalfields Limited (MCL), a subsidiary company of Coal India Limited, is contributing approximately 350 acres of its coal-bearing land in Lakhanpur, Jharsuguda district of Odisha, where the BCGCL project will be constructed. This apart, MCL will meet the coal requirement for this project, supplying 0.79 Mty (Million Tonnes per Year) of washed coal and 1.19 Mty of reject from its Ib Valley washery, officials said.

They said that the project is aligned with the Centre's National Coal Gasification Mission and is expected to serve as a model for future coal-to-chemicals projects across the country.

This project is aimed to produce approximately 0.66 million tonnes per annum (MTPA) of technical grade ammonium nitrate through coal gasification and represents one of India's pioneering commercial-scale initiatives utilising domestically developed pressurised fluidised bed gasification (PFBG) technology for chemical production, an official statement said.

Meanwhile, the Rs 25,000 crore project has received Single Window Clearance from the High-Level Clearance Authority (HLCA), of the Odisha government and has also been granted financial incentives of Rs 1,350 crore by the Ministry of Coal. These approvals provide a major impetus to the commercialisation of indigenous coal gasification technology, officials said.

With all key statutory and environmental approvals, major clearances in place, financial support secured, and lump sum turnkey execution packages awarded, the project is targeting a commissioning schedule by September 2029 and is expected to emerge as a flagship project demonstrating India's capability in converting coal into high-value chemical products through indigenous technology, they said.