New Delhi, Oct. 18 -- In 2006-07, a natural gas squeeze hit Jindal Steel Ltd. Crucial for stripping oxygen from iron oxide during steelmaking, the fuel was largely imported back then. Worse still, steelmakers stood far down the Indian government's priority list for domestic allocations, well behind power and fertilizer plants.

The hunt for a workaround took the company all the way to South Africa. There, engineers had spent over 40 years mastering coal gasification to produce syngas (short for synthesis gas).

"To overcome sanctions that curtailed the availability of crude oil during apartheid, South Africa, which had large coal reserves, embraced coal gasification," recalled V.R. Sharma, the managing director of Jindal Steel. "They conv...