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SAIL in talks with ONGC to jointly explore coal-bed methane

SAIL in talks with ONGC to jointly explore coal-bed methane

State-run SAIL is in talks with India's biggest energy explorer, ONGC, to jointly explore coal-bed methane in coal blocks allocated to the steel major for captive consumption.

"SAIL has approached us for CBM (coal-bed methane) projects," ONGC chairman Sudhir Vasudeva told ET. Discussions are at a preliminary stage and the blocks have not yet been identified, he added.
Use of CBM is part of SAIL's plan to reduce input costs. The steel maker is already using methane produced from an ONGC-operated block in Jharkhand.

"The two companies are exploring the possibilities of further increasing sourcing of CBM to SAIL with development of more gas fields by ONGC," SAIL chairman CS Verma said.

SAIL, which is making efforts to develop new coal blocks at Tasra and Sitanala, has appointed a mine developer-cum-operator for the 4-million tonnes per annum capacity Tasra block. The company expects large-scale output from the block by 2015 after land acquisition and associated infrastructure, Verma said in the company's annual report.


The steel maker is examining the possibility of exploiting methane trapped in coal seams of its captive blocks after the government allowed Coal India, the world's biggest coal miner, to produce CBM, government and industry officials said.

"CIL has huge coal acreages. It has expertise in coal mining and we specialise in gas production. There is an excellent synergy and I'm hopeful," Vasudeva said. State-run Coal India has about 470 coal blocks in eight states.

The Cabinet last week allowed CILBSE 0.25 % to produce methane from its existing coal mines, which put an end to the turf war between the oil and coal ministries over ownership of the natural resources. The coal ministry regulates exploitation of coal resources while CBM comes under the oil ministry.

Coal mining is safer after producing methane from the coal seams, which is often flared, officials said. CBM is an eco-friendly natural gas stored in coal seams and it is mainly used as an industrial fuel. Commercial production of methane from coal also helps in reducing the green house gas effect by preventing direct emission of methane from coalmines.

Source: The Economic Times


 Sudhir Vasudeva | SAIL | ONGC | coal mining | coal blocks | CIL