NEW DELHI — NLC India Limited (NLCIL) and Reliance Industries Limited (RIL) have entered into a strategic partnership to explore the development of an Underground Coal Gasification (UCG) project in Gujarat, marking a significant step toward strengthening India’s domestic energy resources and reducing dependence on imported fuels.
The two companies have signed a joint agreement to evaluate the technical and commercial viability of converting deep-lying lignite reserves into synthesis gas (syngas) through advanced underground gasification technology. The initiative is expected to support India’s long-term energy security goals while promoting cleaner and more efficient utilization of indigenous fuel resources.
Strategic Collaboration for Energy Innovation
Under the agreement, NLC India Limited, one of the country’s leading lignite mining and power generation companies, will contribute its expertise in lignite resource development and provide access to its two lignite blocks located in Gujarat.
Reliance Industries, one of India’s largest private-sector conglomerates, will bring its extensive experience in gasification technologies and large-scale industrial operations. The company has developed significant expertise through its integrated energy and petrochemical complex at Jamnagar, Gujarat.
Together, the companies will undertake comprehensive technical, geological, environmental, and economic feasibility studies to determine the project’s commercial potential and long-term sustainability.
How Underground Gasification Technology Works
The proposed Underground Coal Gasification (UCG) process involves injecting controlled amounts of oxygen and steam into underground lignite seams. This process converts the lignite into syngas, a valuable fuel consisting primarily of hydrogen, carbon monoxide, and methane.
The generated gas is extracted to the surface and can be used for multiple applications, including:
- Power generation
- Industrial fuel supply
- Chemical production
- Hydrogen manufacturing
- Synthetic fuel production
Unlike conventional mining, UCG enables the utilization of deep coal and lignite reserves without extensive excavation, resulting in significantly lower surface disruption and potentially reduced environmental impact.
Supporting India’s Energy Security Goals
The collaboration aligns with the Government of India’s National Coal Gasification Mission, which aims to increase domestic gasification capacity and reduce the nation’s reliance on imported natural gas, crude oil, and other energy resources.
Energy experts believe that successful deployment of UCG technology could unlock substantial untapped lignite reserves across the country, helping India diversify its energy mix and improve fuel self-sufficiency.
As global energy markets continue to experience volatility, projects focused on domestic resource utilization are increasingly viewed as critical components of India’s long-term energy strategy.
Feasibility Studies Underway
The joint study program will evaluate several key factors, including:
- Geological suitability of the lignite deposits
- Syngas production potential
- Environmental and sustainability considerations
- Infrastructure requirements
- Commercial viability and project economics
- Long-term operational feasibility
The companies stated that additional details regarding investment requirements, project timelines, and potential commercialization plans will be announced once the feasibility assessment is completed.
Positive Market and Industry Response
The announcement has been welcomed by investors and industry stakeholders, who view the partnership as a strategic move toward energy diversification, technology-driven resource utilization, and industrial innovation.
Analysts note that the collaboration combines the strengths of a major public-sector mining company with the technological capabilities of one of India’s largest private enterprises, creating a strong foundation for developing next-generation energy solutions.
If proven viable, the Gujarat project could serve as a model for future lignite gasification projects across India and contribute significantly to the country’s efforts to build a more secure, sustainable, and self-reliant energy ecosystem.
Key Highlights
- NLC India Limited (NLCIL) and Reliance Industries Limited (RIL) have signed an agreement to explore a UCG project in Gujarat.
- The project aims to convert deep lignite reserves into syngas without traditional mining.
- Technical and commercial feasibility studies are currently underway.
- The initiative supports India’s National Coal Gasification Mission.
- Syngas can be used for power generation, industrial applications, chemicals, and hydrogen production.
- The project could strengthen India’s energy security and reduce dependence on imported fuels.
- The partnership combines public-sector resource expertise with private-sector technological innovation to advance the nation’s energy transition goals.
