Underground Coal Gasification (UCG) is the process of converting coal in situ into a gas that can be used for industrial heating, power generation, as a chemical feedstock or for the manufacture of hydrogen, synthetic natural gas or diesel fuel.

UCG has the potential to exploit coal resources in a more environmentally friendly manner than conventional open cast or underground coal mining methods. It can also release the stranded potential of reserves that are inaccessible due to depth, geology or other mining and safety considerations.

UCG is achieved by drilling boreholes into a coal seam. Air or oxygen mixed with steam is then injected under pressure and is reacted at the coal seam. The resulting chemical reactions cause a combustible gas that travels through the coal. This produced 'syngas' has a significant calorific value. Continued, controlled combustion can be achieved using technologies developed for the oil & gas industry to move the ignition point through the coal seam.

By combining technologies to suit each project scenario, the cost of the gas per unit of energy is much lower than conventional gas. When compared to current coal-fired power generation, these factors combine to provide a competitive cost of power at a smaller scale, with reduced emissions. UCG technology also has the potential to complement Carbon Capture and Sequestration (CSS) projects.