Coal India (CIL) has issued a letter of acceptance (LoA) 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 (BCCL), the Jharkhand-based subsidiary of CIL, was won by the CBM developer through a global bidding process.
BCCL will be investing around 20 percent in the project, which is estimated to entail an estimated capital of Rs 1,880 crore 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. Raniganj CBM block under Eastern Coalfields, West Bengal, has a 2.2 BCM resource, while Sohagpur CBM block under South Eastern Coalfields has 500 million cubic mtr of methane.
The 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.
Jharia CBM Block-I, spread over 27 sq km, has a CBM resource of over 26 BCM. Average production capacity is pegged at 1.3 mmscmpd 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.
