India moves to begin production of coal bed methane

Coal India Ltd (CIL) will be able to begin production of coal bed methane (CBM) trapped in mines the company owns, thanks to the Indian Government’s new coal bed methane policy, which it will unveil in the coming weeks.

There are vast tracts of coal blocks at CIL mines with potential to produce CBM gas from below coal seams.

India’s Oil secretary, Vivek Rae, said “We will go to cabinet with a new CBM policy and a policy for shale gas exploration in the coming week.”

The proposed policy hopes to provide CIL with incentives to exploit gas within its coal blocks, Rae said. The state-owned firm will not have to bid for these blocks, as it already owns them.

The government has previously held 33 CBM blocks up for auction, with companies including Oil and Natural Gas Corp. (ONGC) and Great Eastern Energy Corp. bidding for the rights to extract CBM.

The oil ministry is currently working on another proposal, which would allow extraction of CBM from coal blocks allotted to several other private and state-run companies for captive use.

Edited from various sources by Samuel Dodson

Published on 15/07/2013

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