Coal India may adopt PPP model to harness CBM

Coal India is likely to adopt the public-private partnership (PPP) model to harness the coal bed methane (CBM) opportunity from its existing mines.

“Coal India is unlikely to invest in developing CBM, rather we will appoint an operator for the same on turnkey basis who will bring in resource and technology,” sources close to the development told PTI.

“We propose to select the operator who will share maximum revenue with us, no matter if it is a private entity or PSU,” they said.

The sources said Coal India had no restriction in inducting a CBM private operator and the tender inviting expression of interest was expected by March, 2014.

Earlier this month, the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Manmohan Singh, allowed Coal India, the world’s largest coal miner, to explore and produce CBM in its existing mines.

CIL had short-listed five blocks in Jharkhand with estimated CBM reserves of about 1 Tcf for exploration in the first stage, they added.

Extracting methane gas ahead of coal mining from seams would allow CIL help unlock very significant quantities of coal reserves in Jharkhand and West Bengal.

Coal-IndiaCIL holds at least 20 per cent of the estimated 60 billion tonne of coal resources in India. It has several coal mines in eight states, which were estimated to have CBM reserves of 3.5-4 trillion cubic feet (Tcf). Many were gaseous and unsafe mines, where mining of coal was possible only after the extraction of CBM.

Since 2001, 33 CBM blocks were awarded in four auction rounds. Besides, two CBM blocks were awarded to Oil and Natural Gas (ONGC) and one to Great Eastern Energy Co. Ltd were awarded on a nomination basis.

-Business Line