Bhubaneswar, March 23 (IANS) Jindal Steel and Power will invest $10 billion to set up a coal-to-liquid plant and a 2,000 MW thermal power plant in the state, the company's Managing Director Naveen Jindal said here Tuesday.

He said an agreement with the Orissa government will be signed in the next two to three months for setting up the coal-to-liquid project. In the plant, different processes and technology will be used to convert coal into liquid fuels such as gasoline or diesel.

Jindal said he met Chief Minister Naveen Patnaik and senior government officials Monday evening to discuss the project.

"The state has received an investment proposal of Rs.101,100 crore (Rs.1 trillion/$22 billion) from Jindal Steel and Power. About $10 billion has been proposed for the new coal-to-liquid project," a senior official of the state steel and mines department said.

The project includes the coal-to-liquid plant, the thermal plant and a coal washery.

A coal block has already been allocated to the company in Angul district, over 160 km from here, by the central government. And the steel producer and power utility is now looking for about 2,000 hectares of land for the project, Naveen Jindal said.

"About three sites were being explored and the company prefers a location near the coal block," a senior company official told IANS.

Also, Jindal is building a 12.5 million tonne steel plant, a 1,320 MW capacity power plant and an industrial complex in the same district. The company requires about 4,500 acres land for the steel and the power plant. "About 4,000 acres has already been acquired," the official said.

"The work on the steel and the power plant is going on and we hope to commission one part of the power plant and the steel plant by the end of this year," he said.