Companies

Coal India issues LoA for coal bed methane project in Jharkhand

Our Bureau Kolkata | Updated on June 17, 2021

CIL’s arm Bharat Coking Coal would invest around 20 per cent in the Jharia CBM Block-I project.

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Coal India Ltd (CIL) has issued a Letter of Acceptance to a CBM developer to extract coal bed methane (CBM) within its leasehold area. CBM is the unconventional form of natural gas found in coal seams.

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.

BCCL will be investing around 20 per cent in the project, which is estimated to entail an estimated capital of ₹1,880 crores as per the project feasibility report. The remaining would be put up through the CBM developer.

CIL has 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 a 2.2 BCM resource, while Sohagpur CBM block under South Eastern Coalfields has 500 million cubic metres of methane.

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.

Project prospects

Jharia CBM Block-I, spread over 27 sq.kms, has a CBM resource of over 26 BCM. Average production capacity is pegged at 1.3 million metric standard cubic metres per day once the commercial operation kick starts. With the life span of this methane extraction project spread over 25 years, the development and production are expected to start from 2026.

“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 a part of our diversification portfolio under clean coal initiatives,” a senior company executive said in a press statement issued by the company.

Methane has energy potential, and the captured gas can be put into use for many commercial uses. The commissioning of the gas pipeline in eastern India under the URJA Ganga project is in the works by GAIL. CBM produced may be used for city gas distribution or through the pipeline for potential users.

“Useful exploitation of CBM would not only lead to its efficient use as energy fuel but would also prevent its release into atmosphere during coal mining,” the official said.

Published on June 17, 2021

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