Reliance Plans Rs 2.73 Lakh Crore Coal Gasification Complex

Reliance Industries Ltd. gained 0.45% to Rs 1,313.35 after reports indicated that the company has proposed an investment of approximately Rs 2.73 lakh crore in an integrated underground coal gasification complex in Andhra Pradesh’s Eluru district. The proposed investment is expected to be deployed over nearly 30 years, highlighting the long-term nature and strategic importance of the project.

According to media reports, the proposed complex would utilize deep coal reserves located in the Chintalapudi and Recherla blocks to produce synthetic gas, commonly known as syngas. Syngas can serve as an important feedstock for manufacturing chemicals, methanol, synthetic fuels and other industrial products, potentially strengthening domestic supply chains.

The project follows Reliance Industries’ acquisition of the two coal blocks through the government’s commercial coal mining auctions earlier in 2026. By integrating coal resources with downstream gasification capabilities, the company could establish a domestic feedstock platform that supports multiple segments of its energy and chemicals businesses.

Reliance reportedly plans to begin exploration activities later this year, subject to encouraging results from preliminary assessments. The initial exploration phase will help determine the quality, availability and commercial viability of the deep coal reserves before the company proceeds with large-scale development.

The proposed investment also aligns with India’s broader efforts to reduce dependence on imported energy and industrial feedstocks. Domestic production of syngas could provide an alternative source of raw materials for chemical manufacturing while supporting the development of synthetic fuels and methanol. Over the longer term, the project could contribute to greater feedstock security for India’s petrochemical and chemical industries.

The development also represents a significant strategic expansion for Reliance, whose operations span oil-to-chemicals, exploration and production, new energy, digital services, retail and consumer businesses. The coal gasification initiative could strengthen the company’s position across the domestic energy and chemicals value chain.

Reliance entered the project discussion at a time when its financial performance remained robust. Its consolidated net profit rose 6.12% year over year and 12.66% quarter over quarter to Rs 23,196 crore in Q1 FY27, including profit contributions from associates and joint ventures. Consolidated gross revenue increased 24.50% year over year and 4.60% quarter over quarter to Rs 3,40,257 crore during the June 2026 quarter.

Product and Chemical Commodity Price Impact

The proposed coal gasification project could have a long-term supportive impact on Reliance’s chemical and synthetic fuel feedstock security, although the immediate market effect is likely limited because commercial production remains years away. Increased domestic syngas availability could reduce reliance on imported natural gas and other feedstocks, potentially lowering production costs for methanol, ammonia and selected downstream chemicals. Greater methanol output could eventually pressure methanol prices if supply expands faster than demand. Meanwhile, reduced dependence on imported feedstocks could improve cost competitiveness for Indian chemical producers. For commodities tracked by ChemAnalyst, the project is therefore broadly neutral in the short term but potentially bearish for methanol prices over the long term if substantial capacity materializes.