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The ministry of petroleum and natural gas has received an approval from the Coal ministry on the proposal of Coal India Ltd (CIL) to start exploration of methane from its coal bed .
Following this, it is likely to propose starting of coal bed methane (CBM) exploration by Coal India Ltd in its existing 4.5 lakh hectares of area either leased or licensed under Nationalisation Act.
According to officials, a mandate to CIL to initiate CBM exploration forms part of cabinet note for finalisation of the Coal Bed Methane (CBM) and shell gas policy soon.
The solution has been envisaged as a way to avoid confrontation with the Coal ministry over jurisdiction of blocs under exploration and get on with the exploration which is delayed due to jurisdictional issue, officials close to the development said. They added that exploration by CIL could mean covering almost 80% of the coal bed which they possess. They can even expand exploration on coal beds yet to come up for production.
The cost recovery issue does not arise now as it will be zero profit and no royalty proposal since presence of methane has to be assured first and only then one could disuss the pricing. The motto of the policy is to ensure extraction and availability of gas owing to shortage of domestic gas production. Besides, the coal bed where exploration is under discussion has current production below 2.5 mmscmd as of now which is however expected to go up post in depth exploration.
Albeit as per the new policy, marketing of the gas will be the jurisdiction of the petroleum ministry, clarified officials.
The proposal however keeps 33 blocs already auctioned by the ministry of petroleum out of ambit . Officials clarified that the CBM policy to be adopted will be a joint venture between CIL and ministry of petroleum keeping private parties out at first.
The policy makes CIL the authority to decide wherever it thinks fit to explore, be it coal bed above 300 mts of coal seam or coal bed below 300 mts and above 600 mts. Officials added currently there is no data suggesting presence of gas below 600-1200 ,mts of coal bed.
After the auction of 33 blocks to private parties, the Coal ministry had raised serious objections over jurisdiction and operation of CBM exploration on coal beds allocated. One of the issues was coal seam prioritisation as coal bed exploration for methane will destroy coal, seams especially above 300 mts where mining area has already been allocated to lessees, as per the views of the coal ministry.
Therefore there was need to prioritise area for coal mining and gas exploration on coal bed. Secondly, once exploration takes place on coal bed, private parties may engaged in illegal mining of coal as areas get earmarked even before coal mining leases are allotted, said the views of Coal ministry. Officials in petroleum ministry said, such issues will keep almost 70% of the prospective mining area out of the ambit of exploration , thus rendering the whole policy redundant.
Therefore while the terms and conditions of CBM policy adopted in 1997 remains intact, the current policy to be tabled before the cabinet will be an arrangement between two ministries - coal and petroleum and natural gas .
Currently, the total methane production in India stands at approximately 0.32 million metric standard cubic meters per day which is expected to go up to 7.4 mmscmd by 2014.
