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Coal India plans to invest Rs 3,000 crore in coal bed methane (CBM) projects and invite global bids to procure the necessary technology.
The first project is likely to be undertaken by its subsidiary, Bharat Coking Coalfields, at Jharia coalfields in Jharkhand. This block holds reserves of 25 billion cubic metres and is expected to start production two years after the project is initiated.
The second project would be undertaken at Ranigunj in West Bengal by Eastern Coalfields. This block holds around 3 billion cubic metres of CBM trapped in coal seams that can be viably extracted and sold in the market.
The development comes a day after the Cabinet Committee of Economic Affairs (CCEA) waived off the coal major’s requirement of procuring separate licences from the ministry of petroleum and natural gas for extracting coal bed methane from its lease hold areas.
“We are now in a position to invest in CBM and would take up these projects as soon as possible,” Coal India Chairman Gopal Singh said. A senior Coal India executive said: “We are waiting for the gazette notification on this. Once it is issued, we would start two projects that have been planned. Coal India subsidiaries would invite global tenders and the plan is to appoint experienced operators for both the projects.”
Coal India’s CBM projects were on hold following a notification by the government in 2015 which made it mandatory for the PSU to procure operating licence from the petroleum ministry for undertaking CBM projects on its leasehold areas.
A recent notification by the government allows Coal India to undertake such projects either in joint venture with a third party – domestic or foreign — or in collaboration with an experienced operator. “We intend to appoint operators for the CBM projects,” the executive said.
Coal India was one of the earliest movers in the sector. Way back in 2004, the company received funding from UNDP Global Environment Fund and the Centre to set up a pilot project in Moonidih. “Three wells were dug and CBM was successfully extracted from them which was used to generate power. It was a successful project,” the executive said.
Methane released by coal deposits remains trapped in seams, which escapes into the atmosphere when coal is mined. Methane trapped in mines can kill miners if present in high concentration. However, when extracted in concentrated form, methane can replace natural gas that can be transported in pipelines.
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