Larsen & Toubro has secured a ?2,500–?5,000 crore contract for India’s largest coal-to-ammonium nitrate plant in Odisha, boosting domestic production capacity. The project supports energy security, reduces import dependence, and advances self-reliance using indigenous coal gasification technology.
Larsen & Toubro (L&T) Energy Hydrocarbon Onshore has secured a significant "large" order from Bharat Coal Gasification and Chemicals Ltd (BCGCL) for a state-of-the-art Coal-to-Ammonia Nitrate project in Lakhanpur, Odisha. This landmark project, valued by L&T between Rs. 2,500 crore and Rs. 5,000 crore, is a crucial step towards India's energy security and industrial self-reliance. The overall project investment is estimated to be around Rs. 25,000 crore, with additional financial support of Rs. 1,350 crore from the Ministry of Coal to promote coal gasification.
The project aims to establish a facility capable of producing 2,000 tonnes of ammonium nitrate per day. This makes it India's largest single coal-to-chemical facility under development, and it is poised to become the third-largest globally in terms of ammonium nitrate conversion capacity. BCGCL, a joint venture between Coal India Ltd (CIL) (51%) and Bharat Heavy Electricals Ltd (BHEL) (49%), is spearheading this initiative. L&T's contract (LSTK Package-4) encompasses the development of the Nitric Acid and Ammonium Nitrate Plant, covering process licensing, basic and detailed engineering, procurement, construction, commissioning, and performance guarantee test runs, under a Lump Sum Turnkey (LSTK) basis. Other major unit contracts (LSTK-1 and LSTK-2) have been awarded to BHEL.
A key aspect of this project is its reliance on indigenously developed Pressurised Fluidised Bed Gasification (PFBG) technology by BHEL. This technology is specifically designed to efficiently handle India's high-ash coal, which often poses challenges for standard imported gasifiers. The conversion of coal into synthesis gas, and subsequently into ammonia and ammonium nitrate, represents a cleaner way to utilize India's abundant coal reserves beyond traditional combustion for power generation.
The project carries significant economic and industry-specific impacts. Strategically, it will substantially reduce India's import dependence for ammonium nitrate, a critical component used in explosives for mining and infrastructure, as well as in fertilizers for agriculture. This backward integration will lead to cost reductions (estimated 10-15% in procurement for CIL) and enhanced supply chain stability for Coal India Limited, a major consumer of ammonium nitrate. Furthermore, it aligns with the "Aatmanirbhar Bharat" (self-reliant India) initiative, strengthening domestic industrial capabilities in the energy and chemical sectors and contributing to the ambitious target of achieving 100 million tonnes of coal gasification capacity by 2030. The project also creates integrated industrial clusters around coal mining regions, maximizing economic value from domestic resources and conserving foreign exchange. Geopolitically, such initiatives enhance India's energy security by diversifying its resource utilization and reducing vulnerability to global supply chain uncertainties.
