BCGCL and MCL Ink Land Deal for India’s First Coal Gasification Project

Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) have signed a land lease agreement for a coal gasification project in Lakhanpur, Jharsuguda district of Odisha.  

As per news reports, the project will be developed on more than 350 acres of land owned by MCL. The agreement was signed in the presence of Union Coal and Mines Minister G Kishan Reddy in New Delhi. 

Project Scale and Output 

The proposed plant will have a capacity of 2,000 tonnes per day and is estimated to cost around ₹25,000 crore. It will produce ammonium nitrate, which is used in fertilisers and mining operations.  

The project is being positioned as the first coal-to-ammonium nitrate facility based on domestic technology. 

Technology and Execution 

The plant will use coal gasification technology developed by Bharat Heavy Electricals Limited (BHEL). This process converts coal into synthesis gas, which is then used to produce chemicals.  

Engineering and construction work has been divided into 4 packages. BHEL has secured 2, while Larsen & Toubro (L&T) has been awarded the other 2. Site preparation work has started. 

Policy Support and Programme Details 

The project is part of a larger coal gasification programme under the Ministry of Coal. In total, 7 projects worth ₹64,000 crore have been approved across Maharashtra, Odisha, and West Bengal.  

The Union Cabinet has approved ₹8,500 crore to support such projects, with ₹1,350 crore allocated for this unit. A recent policy change has allowed coal-bearing land to be used for gasification. 

Resource Position and Sector Context 

India has coal reserves of around 400 billion tonnes, among the largest globally. The project comes amid supply disruptions linked to the West Asia conflict.  

Coal gasification is being used to convert domestic coal into chemicals that are otherwise imported. 

Read More: BHEL Share Price in Focus; Receives 5-Year Relaxation for Procurement of 21 Items from Land Border Countries! 

Conclusion 

The Lakhanpur project has entered the implementation phase following the land agreement and award of contracts. It is one of several projects being taken up to expand coal gasification capacity in the country. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.