New Delhi, May 31: State-run NLC India Limited and Reliance Industries Limited have joined hands to explore the development of an underground lignite gasification project in Gujarat, a move aimed at boosting domestic gasified fuel production and strengthening India’s energy security.
According to sources, 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. The project is expected to utilize two lignite blocks owned by NLC India in Gujarat.
Preliminary technical studies for the proposed project are currently underway. Reliance Industries has been brought in for its expertise in gasification technologies and large-scale energy projects, while NLC India will provide access to lignite resources and mining infrastructure.
Focus on Energy Security
The proposed project comes at a time when India is looking to reduce its dependence on imported fuels amid global energy market uncertainties. If found viable, underground lignite gasification could generate synthesis gas, a mixture of hydrogen, carbon monoxide, and other gases, which can be used as industrial fuel or as feedstock for chemical and fertilizer production.
Industry experts believe the partnership could help accelerate the commercialization of underground gasification technology and unlock the value of lignite reserves that may be difficult to mine through conventional methods.
NLC India’s Diversification Plans
As part of its broader diversification strategy, NLC India is also developing a lignite-to-methanol plant at Neyveli in Tamil Nadu. The project, estimated to cost Rs 4,394 crore, is expected to be completed next year.
The methanol project aligns with the Centre’s coal gasification mission, which aims to promote cleaner utilization of coal and lignite resources while supporting India’s long-term energy transition goals.
Centre Pushes Coal Gasification
The development follows the Union Cabinet’s recent approval of a Rs 37,500 crore incentive scheme to promote coal and lignite gasification projects across the country. The initiative targets the gasification of around 75 million tonnes of coal and lignite and supports India’s larger goal of gasifying 100 million tonnes of coal by 2030.
The programme is expected to reduce dependence on imports of key commodities, including liquefied natural gas (LNG), methanol, ammonia, and urea, while enhancing domestic energy production.
Strategic Importance
Officials and industry experts view underground lignite gasification as a significant step toward maximizing indigenous energy resources. The technology enables the conversion of lignite into usable gas without extensive surface mining, potentially reducing environmental impact while increasing resource utilization.
NLC India, traditionally known for lignite mining and power generation, has been expanding into renewable energy, coal mining, and advanced fuel technologies as part of its long-term growth strategy.
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