NLC India, Reliance Partner to Explore Underground Lignite Gasification Project in Gujarat

NLC India Ltd. (NLCIL) and Reliance Industries Ltd. (RIL) have partnered to explore the development of an underground lignite gasification project in Gujarat, aimed at boosting domestic gasified fuel production and strengthening India's energy security amid global fuel supply uncertainties.

The two companies have signed an agreement to assess the feasibility and technical viability of converting lignite reserves into synthesis gas through underground gasification technology.

According to reports, NLCIL's lignite blocks in Gujarat have been identified for preliminary studies, which are currently underway. Reliance Industries has been brought on board for its expertise in gasification technologies and downstream gas handling, with the collaboration expected to help address technical challenges and accelerate project development. If successful, the project could produce synthesis gas, a mixture of hydrogen, carbon monoxide and other gases, which can be used as industrial fuel and as feedstock for the chemical and fertiliser sectors.

The initiative is expected to partially address domestic gas shortages and reduce dependence on imported liquefied natural gas (LNG). Industry experts believe the partnership could enhance India's energy security while providing a new avenue for utilising lignite resources. Underground lignite gasification enables the conversion of in-situ lignite into usable gas without conventional mining, offering an alternative method for monetising lignite reserves.

The project forms part of NLCIL's broader diversification strategy. The company is also developing a INR 4,394-crore lignite-to-methanol plant at Neyveli in Tamil Nadu, which is expected to be completed next year. The methanol project aligns with the Centre's push for coal and lignite gasification as a sustainable pathway for meeting energy requirements and supporting long-term decarbonisation goals.

The development comes as the Union government intensifies efforts to promote coal and lignite gasification. Earlier this month, the Union Cabinet approved a INR 37,500-crore scheme to support surface coal and lignite gasification projects, targeting the gasification of around 75 million tonnes of coal and contributing to the national goal of gasifying 100 million tonnes by 2030. The initiative is expected to reduce India's dependence on imports of LNG, methanol, ammonia and other key industrial inputs while strengthening domestic energy security.