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Natural gas from coal bed methane is likely to contribute to five per cent of national gas production by 2017, Minister of State for Petroleum and Natural Gas, Dharmendra Pradhan, said in a tweet late last night.
He wrote this after a meeting with CBM producers in India who, he said, had invested Rs 10,000 crore collectively in CBM blocks.
Coal bed methane refers to a reserve of natural gas stored in coal seams. With India having the fourth largest proven reserves of coal globally, according to the Directorate General of Hydrocarbons, the country holds significant prospects for exploration and production of CBM, which is also seen as a clean energy source.
Currently, Great Eastern Energy Corporation and Essar OIl are the only two CBM-gas producing blocks in the country, both from separate reserves in Raniganj, West Bengal. Reliance Industries has reportedly begun test production from its two blocks in Madhya Pradesh.
However, pricing is crucial to encouraging more production, as the government has reduced the price for domestic gas from $4.24 per million British thermal unit (mmBtu) last year to $3.06 mmBtu this April, in line with falling gas prices globally.
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