BCGCL and MCL Sign Land Lease for Lakhanpur Coal Gasification Project

03 Apr 2026 CW Team

The facility is designed for 2000 tonnes per day (t per day) of ammonium nitrate and will occupy about 350 acres of Mahanadi Coalfields Limited land. Policy reforms permit the utilisation of Coal Bearing Area land for gasification projects and enable value added use of domestic coal. Major lump sum turnkey packages LSTK-1 and LSTK-2 have been awarded to Bharat Heavy Electricals Limited while LSTK-3 and LSTK-4 have been awarded to Larsen & Toubro and site development works are under way.

The Ministry of Coal has provided financial support of Rs 13.5 billion (bn) under its dedicated incentives scheme and the Cabinet has approved an outlay of Rs 85 bn to promote coal gasification. The project has an estimated investment of about Rs 250 bn and is expected to support import substitution and conserve foreign exchange. Officials noted that seven projects have been finalised and three have completed bhoomi pujan and urged industry and investors to engage actively to ensure timely implementation.

Senior officials said statutory clearances, letters of award and tender processes are at advanced stages and that the agreement will accelerate execution. The signing was presented as a model for indigenous development with a competitive cost structure and officials called for strong coordination among public sector undertakings and prompt escalation of issues. The event also included the inauguration of the official website of Bharat Coal Gasification and Chemicals Limited to improve transparency and provide project updates.

A land leasing agreement was signed between Bharat Coal Gasification and Chemicals Limited and Mahanadi Coalfields Limited for a Coal to Ammonium Nitrate project at Lakhanpur, Odisha. The ceremony in New Delhi was attended by the Union Minister of Coal and Mines and marked the first deployment of indigenously developed gasification technology by Bharat Heavy Electricals Limited. The initiative advances coal gasification and aims to reduce reliance on imported technologies. The facility is designed for 2000 tonnes per day (t per day) of ammonium nitrate and will occupy about 350 acres of Mahanadi Coalfields Limited land. Policy reforms permit the utilisation of Coal Bearing Area land for gasification projects and enable value added use of domestic coal. Major lump sum turnkey packages LSTK-1 and LSTK-2 have been awarded to Bharat Heavy Electricals Limited while LSTK-3 and LSTK-4 have been awarded to Larsen & Toubro and site development works are under way. The Ministry of Coal has provided financial support of Rs 13.5 billion (bn) under its dedicated incentives scheme and the Cabinet has approved an outlay of Rs 85 bn to promote coal gasification. The project has an estimated investment of about Rs 250 bn and is expected to support import substitution and conserve foreign exchange. Officials noted that seven projects have been finalised and three have completed bhoomi pujan and urged industry and investors to engage actively to ensure timely implementation. Senior officials said statutory clearances, letters of award and tender processes are at advanced stages and that the agreement will accelerate execution. The signing was presented as a model for indigenous development with a competitive cost structure and officials called for strong coordination among public sector undertakings and prompt escalation of issues. The event also included the inauguration of the official website of Bharat Coal Gasification and Chemicals Limited to improve transparency and provide project updates.

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