State-owned CIL has given a go-ahead to a domestic firm for a Rs 1,880-crore coal bed methane (CBM) extraction project. The coal behemoth has invited bids from both domestic and overseas companies for two more coal bed methane projects.
Coal India (CIL) will start producing coal bed methane (CBM) from its lease hold area under Bharat Coking Coal (BCCL) in Jharkhand. This is the first time the coal miner is producing gas from coal seams, as part of its diversification plans to produce clean energy from coal. CBM extraction will prevent releasing gas into atmosphere while mining coal.
The letter of acceptance was issued to a coal bed methane developer by Coal India Limited (CIL) this month. “Stepping into a new era of coal bed methane (CBM) extraction within its own leasehold area, CIL in a first has issued letter of acceptance to a CBM developer this month. “This is for extraction of CBM, the unconventional form of natural gas found in coal seams,” CIL said in a statement.
The bid for Jharia CBM Block-I of Bharat Coking Coal Ltd (BCCL), the Jharkhand-based subsidiary of CIL, was won by the CBM developer through a global bidding process.
To come up at a tentative capital of Rs 1,880 crore as per project feasibility report, BCCL will invest 20 per cent of the capital, while the rest would be put up through the CBM developer. In yet another development, accelerating its intent on CBM extraction,
“This is a big step for Coal India. It is for the first time that the company has taken up CBM extraction on its own in its leasehold area. CBM extraction is part of our diversification portfolio under clean coal initiatives,” CIL said.
Methane has energy potential, and the captured gas can be put into use for many commercial uses. The commissioning of gas pipeline in eastern India under URJA Ganga project is in the works by GAIL. CBM produced may be used for city gas distribution or through pipeline for potential users.
Central Mine Planning and Design Institute, the consultancy arm of CIL, will be the principal implementing agency for CIL’s CBM development in its leasehold areas.