Cabinet Approves Two Coal Gasification Plants in West Bengal & Odisha

Utkarsh Classes Last Updated 07-02-2025

Energy 4 min read

The Cabinet Committee on Economic Affairs (CCEA) has approved setting up of two coal gasification plants for Coal India Limited (CIL).

The first of these is for setting up a coal-to-synthetic natural gas (SNG) project in the Eastern Coalfields Limited (ECL) command area whereas proposals for equity investment by CIL for setting up coal-to-ammonium nitrate project in II MCL command area have been approved.

Target of achieving 100 metric tons of coal gasification:

With the establishment of these two plants, the government will be able to easily achieve the target of 100 metric tons of coal gasification by the year 2030. So that the country can be made self-reliant in the field of energy.
There will be an investment of Rs 13,052 crore on the project to produce synthetic natural gas from coal in ECL's Sonpur Bazari area in West Bengal.

It is a joint venture between Coal India Limited and Gas Authority of India Limited. There will be an investment of Rs 11,782 crore on the project to make ammonium nitrate at Mahanadi Coalfields Limited in Jharsuguda district of Odisha. It is a joint venture between Coal India Limited (CIL) and Bharat Heavy Electrical Limited (BHEL).

These projects will start by 2028-29. The Government has also approved the proposal for equity investment for setting up a project to produce synthetic natural gas from coal through a joint venture between CIL and GAIL.
Approval has also been given for setting up a project to produce ammonium nitrate from coal through a joint venture between CIL and BHEL.
The Cabinet has also approved the Promotion Scheme for Coal and Lignite Gasification Projects of Government Undertakings and Private Sector. The outlay of this scheme has been kept at Rs eight thousand five hundred crore as incentive for coal gasification projects.

Investment by CIL has been approved in ECL's Sonpur Bazari area in Bardhaman district of West Bengal through a joint venture between CIL and GAIL.
Under this, 51 per cent equity investment in the JV company has been approved with an equity capital of Rs 1,997.08 crore and an estimated project capex of Rs 13,052.81 crore for the proposed coal-to-synthetic natural gas (SNG).

The coal-to-Ammonium Nitrate (AN) proposed through the joint venture of CIL and BHEL at Lakhanpur area of MCL in Jharsuguda district of Odisha has been granted approval. Under this, equity capital of Rs 1,802.56 crore and 51 per cent equity investment in the JV company has been approved by CIL with an estimated project capex of Rs 11,782.05 crore.