Coal India may get go-ahead to extract CBM from mines
“We have given in-principle approval to a new policy on coal mine methane. We will soon move a Cabinet note to allow CBM extraction by CIL,” a petroleum ministry official said.
At first, CIL may be allowed to extract gas from 80% of its coal blocks on nomination basis. However, the company will be subject to petroleum ministry regulations in marketing gas. Under the CBM policy, blocks are currently auctioned during the Nelp rounds.
The petroleum ministry recently approved a minimum well-head price for Great Eastern Energy Corporation’s CBM gas at $6.79/mmBtu. Essar Oil has sought $4.20 for CBM gas from its West Bengal block while Reliance has sought around $12-13.
With its proven coal reserves of 52.5 billion tonnes — among the highest by any company globally — extracting even a moderate amount of gas could significantly help CIL, since a lot of these reserves are expected to hold huge CBM potential as well.
n Continued on Page 2
“It is difficult to calculate gains at this juncture as everything will depend on the cost of extraction and availability of gas. At present, its too premature to estimate,” CIL chairman and managing director S Narsing Rao told FE.
Once the new policy is approved, CIL can extract
Be the first to comment.