Companies

CIL arm inks revenue sharing contract with Prabha Energy

Shobha Roy Kolkata | Updated on September 20, 2021

Bharat Coking Coal Ltd signed contract for commercial extraction of coal bed methane

Bharat Coking Coal Ltd (BCCL), a subsidiary of Coal India Ltd has signed a revenue sharing contract with CBM developer Prabha Energy Private Ltd for commercial extraction of coal bed methane (CBM).

CBM is the unconventional form of natural gas found in coal seams.

The project is estimated to entail an investment of close to ₹1,880 crore. While BCCL would invest close to 20 per cent (₹370 crore) towards the cost of the land, the remaining (₹1,510 crore) would come from the CBM developer. CBM will be extracted from Jharia Block I under leasehold area of BCCL.

The company was selected through a global bidding process. CIL has assigned CMPDI, its Ranchi based consultancy arm, as the principal implementing agency to oversee the project.

“This is an important development and with this CIL will be stepping into a new era of CBM extraction on its own in its leasehold area,” a senior company official said in a press statement.

Project to be executed in phases

Spread over an area of approximately 27 sq.kms, Jharia CBM Block-I has resource of around 25 Billion Cubic Metres (BCM). Average production capacity is pegged at 1.3 million metric standard cubic metres per day once the commercial operation kick starts.

The project is scheduled in three phases. The first phase of exploration is of two year duration from the signing of the contract followed by the pilot phase of three years. Thereafter the production phase is for thirty years.

Given the vast experience that the CBM developer has, CIL is hopeful that the first two phases would be completed earlier than scheduled and production would commence “sooner than planned”.

CBM extraction is a part of CIL’s diversification portfolio under clean coal initiative.

According to the CIL official, harnessing CBM has dual advantages. On one hand 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,” the company said.

Methane, which is a potent green house gas with global warming potential greater than 25-28 times compared to Co2, is a cause of concern for the safety of mines and environment. Removing fugitive methane gas from underground coal mines and using it in profitable and practical ways would help enhance safety, mine productivity, increase revenues and reduce GHG emissions, it added.

CIL had earlier also floated global bids looking for developers for two more projects having a combined resource potential of 2.7 BCM (Billion Cubic Metres). Raniganj CBM block under Eastern Coalfields Ltd, West Bengal has 2.2 BCM resource while Sohagpur CBM block under South Eastern Coalfields has 500 million cubic metre resource of methane.

Published on September 20, 2021

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