Coal India and HURL agree to study coal-gasification-based urea project

Companies open talks on coal-based urea

Coal India Limited and Hindustan Urvarak & Rasayan Limited, or HURL, have executed a non-binding memorandum of understanding to explore the development of a urea plant using coal gasification. Business Standard reported the agreement, which links India’s largest coal producer with an established domestic fertilizer manufacturer. The companies have not disclosed the proposed plant’s capacity, location, investment requirement or construction schedule.

The non-binding status means the memorandum establishes a basis for evaluating the project but does not constitute a final investment decision. Important commercial questions—including the source and grade of coal, gasification technology, financing structure, product offtake and responsibility for operating the complex—remain unresolved in the information released so far. Technical and economic studies will therefore determine whether the proposal advances to a binding agreement.

HURL brings an existing production platform

HURL was incorporated on 15 June 2016 by Coal India, NTPC and Indian Oil as lead promoters, together with Fertilizer Corporation of India and Hindustan Fertilizer Corporation. It operates revived fertilizer plants at Gorakhpur, Sindri and Barauni. Coal India’s annual reporting says the three natural-gas-based plants each produce 4,000 tonnes of urea per day. HURL produced 3.30 million tonnes of neem-coated urea and generated revenue of ₹15,909.70 crore in the 2024-25 financial year.

The proposed project would introduce a different feedstock route into HURL’s portfolio. Instead of using natural gas directly, coal gasification converts coal into synthesis gas, which can then provide inputs for ammonia and urea production. For HURL, the arrangement offers a possible route to additional capacity backed by a domestic raw material. For Coal India, it would create a higher-value industrial use for coal beyond direct combustion.

Precedent exists, but execution remains decisive

Coal India already participates in the coal-to-urea value chain through Talcher Fertilizers Limited. According to India’s Ministry of Coal, the Talcher project is designed to produce 1.27 million tonnes of urea annually and has an estimated cost of ₹19,062.22 crore. The ministry describes coal gasification as a route for producing synthesis gas and downstream products including ammonia, urea, ammonium nitrate and methanol. This experience provides a reference point for the HURL study, although no indication has been given that the new proposal will replicate Talcher’s scale or configuration.

For India’s fertilizer industry, the commercial significance will depend on whether the project can deliver urea reliably at a competitive cost. Domestic coal availability may reduce exposure to imported gas and fertilizer, but gasification projects require substantial capital, complex processing equipment and dependable coal preparation and logistics. Environmental approvals, water requirements and management of emissions and solid residues will also affect project design. Until the partners publish a feasibility assessment and commit capital, the agreement should be viewed as an option for future capacity rather than an addition to confirmed supply.