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New UserCabinet may allow CIL to produce gas from coal seams
18 Dec 2013
The Cabinet may this week allow state-owned miner Coal IndiaBSE 1.04 %
Ltd to produce natural gas from coal seams (CBM) in its
existing coal mines.
The Cabinet Committee on Economic Affairs (CCEA) is
likely to consider this week allowing Coal India (CIL), the world's largest coal
miner, to explore and produce coal-bed methane (CBM) in its existing mines,
official sources said.
Currently, rules and regulations prohibit mining firms from extracting CBM during
mining as the policy does not allow for simultaneous extraction of methane (CBM)
and coal.
CBM exploration and production is allowed only in pure
coal-seam gas bearing blocks which are auctioned. Since 2001, 33 CBM blocks have
been awarded in four auction rounds. Besides, two CBM blocks to Oil and Natural
Gas Corp (ONGC) and one to Great Eastern Energy Co Ltd were awarded on
nomination basis.
According to the Directorate General of Hydrocarbons (DGH), India has CBM
reserves of about 4.6 trillion cubic metres.
Currently, three CBM blocks
are producing around 0.15 million standard cubic metres per day (mscmd). This is
likely to touch 7.4 mscmd by 2013, according to the DGH.
Sources said CIL holds at least 20 per cent of the estimated 60 billion tons of
coal resources in India. It has several coal mines in eight states, which are
estimated to have CBM reserves of 3.5-4 trillion cubic feet.
Many of its acreage are gaseous and unsafe mines, where mining of coal is
possible only after the extraction of CBM. Extracting methane (gas) ahead of
coal mining from seams will allow CIL help unlock very significant quantities of
coal reserves in areas of Jharkhand, West Bengal.
Sources said Coal India will be allowed to explore for CBM in the mines that
were given to it on nomination basis. It can take a state-owned explorer like
Oil and Natural Gas Corp (ONGC) as a partner for the venture.
Oil Minister M Veerappa Moily had orginally proposed allowing Coal India to rope
in even private firms for CBM exploration and production. But the proposal was
killed after strong objections from Coal Minister Sriprakash Jaiswal.
CBM extracted by CIL will be priced and marketed as per the Oil
Ministry's gas pricing and utilisation policy.
Sources said CIL had short-listed
five blocks in Jharkhand with estimated CBM reserves of about 1 Tcf for
exploration in the first stage. They are: Munidih (282 Bcf), Kathara (282 Bcf),
Asnapani (212 Bcf), Putki Buliwari (247 Bcf) and Mohuda (14 Bcf). These five
assets are considered to be gaseous and unsafe mines at present.
CCBM extraction would help CIL unlock nearly 100 million tons of medium grade
coking coal, and about 1 Tcf of gas.
Source: PTI