New Delhi: Coal India Limited (CIL) and Hindustan Urvarak & Rasayan Limited (HURL) have signed a non-binding memorandum of understanding (MoU) to explore coal gasification-based urea production at Sindri in Jharkhand. The two companies executed the MoU on Tuesday, CIL said in a filing to the stock exchanges. It was signed "for exploring the development of a Coal Gasification based Urea Production at Sindri, Jharkhand," the filing said.
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The first work under the MoU will test whether the project is viable. "Under this Non-Binding MoU, initially the focus shall be to assess the technical, commercial, and implementation modalities of the project and to facilitate preparation of a Preliminary Feasibility Report ('PFR') for evaluating project viability," CIL said.
HURL is a joint venture of CIL, NTPC Limited and Indian Oil Corporation Limited (IOCL). The three hold 89 percent of its equity in equal parts. Fertilizer Corporation of India Limited (FCIL) and Hindustan Fertilizer Corporation Limited (HFCL) hold the remaining 11 percent, according to HURL's website. HURL has set up natural gas-based urea plants at Gorakhpur, Barauni and Sindri. Each is designed to produce 1.27 million tonnes per annum (MTPA) of neem-coated urea.
CIL is also a promoter of Talcher Fertilizers Limited (TFL), which is building a coal gasification-based urea plant at Talcher in Odisha. Its other partners are GAIL (India) Limited, Rashtriya Chemicals and Fertilizers Limited (RCF) and FCIL. The Talcher plant is designed for 1.27 MTPA of urea, the same capacity as each of HURL's gas-based units. CARE Ratings said in a rating note issued in April 2026 that the project's cost had risen to Rs 19,062 crore from the originally approved Rs 13,277 crore. The note also recorded cumulative delays of about 51 months. Those delays have moved commissioning from June 2024 to December 31, 2027.
Outside fertiliser, CIL's largest gasification commitment is at Lakhanpur, in Odisha's Jharsuguda district. On June 20 this year, President Droupadi Murmu laid the foundation stone of a coal-to-ammonium nitrate plant, with Prime Minister Narendra Modi joining remotely. The plant belongs to Bharat Coal Gasification & Chemicals Limited (BCGCL). CIL holds 51 percent of BCGCL and Bharat Heavy Electricals Limited (BHEL) holds 49 percent. The plant is designed to produce about 0.66 MTPA of technical-grade ammonium nitrate. The Coal Ministry put its estimated investment at over Rs 25,000 crore, and commissioning is targeted by September 2029. Coal will come from the Ib Valley washery of CIL subsidiary Mahanadi Coalfields Limited (MCL), which will supply both washed coal and washery rejects.
Two more CIL projects will turn coal into synthetic natural gas (SNG). In West Bengal, Coal Gas India Limited is to set up a plant at Sonepur Bazari, in the command area of Eastern Coalfields Limited (ECL). The company was incorporated in March 2025, with CIL holding 51 percent and GAIL 49 percent. The second SNG plant is planned in the Western Coalfields Limited (WCL) area of Maharashtra. For that project, the board of Bharat Petroleum Corporation Limited (BPCL) approved a joint venture with CIL on December 18, 2025. CIL will hold 51 percent and BPCL 49 percent. When the government awarded incentives in December 2024, each SNG project was listed at 1.83 million standard cubic metres per day (MMSCMD) of gas.
All of these projects sit under the Coal Ministry's National Coal Gasification Mission. "National Coal Gasification Mission has set the ambitious target of achieving 100 Million Tonnes (MT) of coal gasification capacity by 2030," Minister of State for Coal and Mines Satish Chandra Dubey said in a written reply to the Rajya Sabha in July. Against that target, he said, about 22.6 MTPA of capacity was operational or under implementation. Jindal Steel Limited's gasification capacity of about 8 MTPA is already operating. TFL's roughly 2.6 MTPA is still under implementation. So are about 12 MTPA across eight projects backed by the government's Rs 8,500 crore incentive scheme.
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That scheme was approved on January 24, 2024, and offers incentives of 15 percent of capital expenditure, subject to ceilings. In December 2024, the government issued Letters of Award of Rs 1,350 crore each to three projects under it: BCGCL's Lakhanpur plant, the CIL-GAIL SNG project and CIL's Maharashtra SNG project. A larger scheme followed on May 13, when the government approved another tranche of Rs 37,500 crore to promote surface coal and lignite gasification. It offers up to 20 percent of the eligible plant and machinery cost, and it is expected to use about 75 MTPA of coal. Urea is among the products it covers. The scheme caps support at Rs 9,000 crore per product category, but that cap does not apply to urea or SNG, according to a Coal Ministry presentation on the scheme.