NLC India Ltd and Reliance Industries Ltd will jointly assess an underground lignite gasification project in Gujarat to boost domestic gasified fuel supplies and reduce import dependence. They have signed an agreement to evaluate the feasibility and technical viability of converting lignite reserves into synthesis gas through underground gasification. The study will cover two lignite blocks held by NLCIL and preliminary technical work is underway.

Reliance has been engaged for its expertise in gasification technologies and downstream gas handling and the partners envisage the project supplying additional domestic synthesis gas for industrial use. The initiative is intended to strengthen energy security by lowering reliance on imported liquefied natural gas. Underground lignite gasification converts in situ lignite into synthesis gas, a mixture of hydrogen, carbon monoxide and other gases that can be used as industrial fuel or as feedstock for chemicals and fertilisers.

The development aligns with NLCIL's broader diversification strategy and complements other projects at the company. NLCIL is also constructing a Rs 43.94 billion (bn) lignite to methanol plant at Neyveli, Tamil Nadu, which is expected to be completed next year. The partners said the Gujarat assessment will inform technical design, environmental safeguards and potential downstream integration.

The proposed project is consistent with the Union Cabinet's coal gasification push and with a Rs 375 billion (bn) scheme approved to promote coal and lignite gasification projects. That scheme targets the gasification of around 75 million (mn) tonnes (t) of coal and supports India’s broader target of 100 million (mn) tonnes (t) by 2030. NLCIL, a public sector enterprise engaged in lignite mining and power generation, has been expanding into renewable energy and coal mining as part of its long term diversification efforts.

If the assessment demonstrates technical and commercial viability the partners would consider project development and downstream offtake arrangements to supply industry. The studies will also consider environmental management, water use and subsurface risks as part of standard feasibility evaluation.