Page 57 - Policy Economic Report - April 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Spread over approximately 350 acres of land under the possession of MCL, the project has been enabled
through recent progressive policy reforms of the Ministry of Coal. These reforms enable the utilisation of
Coal Bearing Area (CBA) land for coal gasification projects, unlocking new pathways for value-added
utilisation of India’s abundant coal resources and strengthening the sector’s diversification.

Reinforcing its commitment to promoting coal gasification, the Ministry of Coal has extended financial
support of ?1,350 crore under its dedicated financial incentives scheme. The project is already witnessing
strong momentum on the ground, with major LSTK (Lump Sum Turnkey) packages, LSTK-1 and LSTK-2,
having been awarded to BHEL, while LSTK-3 and LSTK-4 have been awarded to Larsen & Toubro.
Simultaneously, site development works, including boundary wall construction and tree enumeration, are
progressing in parallel, ensuring adherence to timelines.

Addressing the gathering at the signing ceremony of the land lease agreement, Union Minister of Coal &
Mines, Shri G. Kishan Reddy, emphasised that, in line with the Prime Minister’s vision of Atmanirbhar
Bharat, the Government is driving focused initiatives to transform the coal sector. Highlighting that India
is endowed with abundant coal reserves, he underscored the imperative to harness this resource beyond
conventional use through large-scale adoption of coal gasification.

He informed that the Cabinet has approved an outlay of ?8500 crore to promote coal gasification, with 7
projects already finalized, including 3 where bhoomi pujan has been completed. Describing the land lease
agreement between MCL and BCGCL, with an investment of about ?25,000 crore, as a significant step
forward, he noted that it marks the first indigenous project of BCGCL and reflects the growing momentum
in this sector.

The Minister asserted that coal gasification will be a game-changer, with the potential to significantly
reduce import dependency and conserve valuable foreign exchange. He emphasised the need to adopt
the best global technologies while simultaneously strengthening indigenous capabilities, assuring full
Government support. Emphasising a whole-of-government approach, he highlighted the coordinated role
of Ministries including MoEF&CC, Ministry of Heavy Industries, and Ministry of Commerce, and urged
industry, investors, and stakeholders to actively participate. He also called for expeditious implementation
of the project, with a focus on completing it ahead of schedule.

Addressing the gathering, Shri Vikram Dev Dutt, Secretary, Ministry of Coal, termed the signing of the land
lease agreement between BCGCL and MCL a landmark milestone in advancing coal gasification in the
country. He emphasised that in the present global scenario, there is a need to accelerate efforts towards
Atmanirbharta and strengthen domestic capabilities.

Shri Dutt noted that all key enablers, including statutory clearances, Letters of Award (LOAs), and tender
processes, are in place and have reached advanced stages, positioning the project for timely execution.
Describing it as a potential model for indigenous development with a competitive cost structure, he urged
all stakeholders to work with a strong sense of ownership, ensure timely escalation of issues, and
demonstrate effective coordination among PSUs for the successful implementation of the project.

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