Coal news and updates

State-owned Oil and Natural Gas Corp. Ltd (ONGC) has decided to invest Rs.4,000 crore to develop its four coal bed methane (CBM) gas blocks.

Two of the four blocks—in North Karanpura and Bokaro, in Jharkhand—would start production by the second half of 2017-18, a senior ONGC official said. Methane is a form of natural gas extracted from coal beds.

The company has sold a 25% stake in its North Karanpura CBM block to Prabha Energy Pvt. Ltd (PEPL), a unit of Deep Industries Ltd. The block in Bokaro would be developed by ONGC. The venture with PEPL is on a joint operatorship model and PEPL would make investments proportionate to its 25% interest in North Karanpura.

“We expect to begin CBM production by the later half of year 2017-18. The cumulative plateau production after development of all the four blocks is estimated to the tune of 1.7 million metric standard cubic metres per day (mmscmd),” said a spokesperson for ONGC in an emailed response.

ONGC was allocated nine CBM blocks, of which it holds four, located in Jharia, Bokaro, North Karanpura and Raniganj in West Bengal. The company had relinquished five CBM blocks, including Wardha, Satpura, Barmer Sanchor, North Karanpura (W) and South Karanpura because of poor potential on the basis of data generated during exploration.

The company said it has proposed to sell its gas at the market discovered price as provided in its CBM contract. It has maintained that since it was isolated in the case of these stand-alone blocks, it faced many concerns and, therefore, wanted to rope in a joint operator. So far, it has spent about Rs.510 crore on the four CBM blocks.

“ONGC has taken concrete steps to discover CBM in the country and is currently operating in four CBM blocks. In view of the mammoth and time-bound task, it has decided to farm-in experienced partners to execute the operations, the process for which is in advanced stages. It will not be prudent to divulge more details at this stage,” ONGC said in an emailed response.

Source: Livemint