BCGCL to Invest Rs. 25,000 Cr. for Coal Gasification Plant in Odisha
Bharat Heavy Electricals Limited (BHEL) and Coal India Limited (CIL) have formed a joint venture (JV) named Bharat Coal Gasification and Chemicals Limited (BCGCL). BCGCL is investing Rs. 25,000 crore to set up India’s first coal-to-ammonium nitrate plant in Lakhanpur, Odisha. Foundation stone for this facility was laid on 20th June 2026.
In this JV, CIL holds 51% equity, with the remaining 49% owned by BHEL. This project had received single window clearance from High-Level Clearance Authority (HLCA), Government of Odisha, in December 2024.
Additionally, Projects & Development India Limited (PDIL) has been chosen as the primary consultant for this project.
Primary Objective of BCGCL’s Coal-to-Chemical Complex
BCGCL’s facility will make use of India’s abundant coal reserves to manufacture industrial chemicals using coal gasification. This facility will primarily convert India’s high-ash coal to syngas and then to Ammonium Nitrate. The project aims to produce 0.6 Million Metric Tonnes Per Annum (MMTPA) of technical-grade ammonium nitrate.
CIL’s Subsidiary to Fulfill Land and Coal Requirement
Contributing to the project, CIL’s subsidiary, Mahanadi Coalfields Limited (MCL), is providing 350 acres of its coal-bearing land where the project will be constructed. Moreover, MCL will provide 0.79 million tonnes per year (MTY) of cleaned coal and 1.19 MTY of reject coal* from its Ib Valley washery in Jharsuguda, Odisha.
*Coal Rejects are by-products of coal washing or coal beneficiation process, in which the rejects are left over as a portion of raw feed coal after separation of beneficiated washed coal and Middlings. These are generated from the coarse circuit of the coal washery process.
BCGCL Awards Turnkey Contracts for Coal-to-Chemical Complex
BCGCL has awarded four Lump-Sum Turnkey (LSTK) packages to execute this coal-to-chemical complex. Off these four packages, Packages 1 & 2 were awarded to BHEL and Packages 3 & 4 to Larsen and Toubro (L&T).
Under these four packages, BHEL will develop gasification and raw syngas cleaning facilities. Whereas, L&T will build the Ammonia Synthesis Unit and Ammonium Nitrate facilities.
Coal Gasification- Solution to India’s Less Efficient High-Ash Coal
Significance of this project and the need for ‘coal-gasification’ can be understood by looking at India’s unique coal geology. Though India has the world’s third-largest coal reserves, their high ash content, ranging between 35% and 45%, makes them thermally less efficient, as they leave a massive ash residue when burned in traditional power plants. Consequently, despite the abundance of coal, its low quality renders it highly inefficient and forces heavy reliance on imports.
To remedy this predicament, coal gasification offers an efficient and clean alternative. Coal gasification does not burn but rather chemically alters coal to syngas using heat and pressure. This Syngas proves to be very versatile in its applications, as it can be used for electricity generation and can be further processed into chemical products such as fertilizers and Ammonium Nitrate.
Previously, this process had limitations as it could not be applied due to our high-ash coal. BHEL’s indigenously developed Pressurised Fluidised Bed Gasification (PFBG) technology comes in as a counter to this limitation. PFBG is specifically designed to handle our high-ash coal, making it a viable and green method to utilize India’s massive coal reserves.
To encourage and commercialize the use of indigenous coal gasification technology, the Ministry of Coal granted this project a financial incentive of Rs. 1,350 crore. Additionally, the Indian Government of India has approved incentive schemes to promote Surface Coal and Lignite Gasification Projects with a cumulative outlay of around Rs 46,000 crore.
About Bharat Coal Gasification and Chemicals Limited: Bharat Coal Gasification and Chemicals Limited, incorporated on 21st May 2024, is a JV between Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL). The company is headquartered in Odisha.
