KOLKATA (miningweekly.com) - Seizing an opportunity offered by recently relaxed rules, State-run miner Coal India Limited (CIL) has lined up a corpus of around $422-million to kick-start its sputtering coalbed methane (CBM) projects.

The renewed thrust of getting the CBM projects off the ground would be initiated by Bharat Coking Coal, a wholly owned operational subsidiary of CIL, which would be taking up developing gas projects at its existing coal blocks with estimated reserves of around 25-billion cubic meters.

The target set by CIL was to operationalise the project within the next two to three years.

The second CBM project would be taken up by another wholly owned subsidiary Eastern Coalfields, at its existing coal blocks with gas reserves estimated at three-billion cubic meters.

CIL’s decision to take a fresh look at its long-pending CBM projects was prompted by recent amendments to the rules by the federal government which stipulated that a miner with a licence for extraction of coal from a specific block would not require a separate licence from the Petroleum and Natural Gas Ministry for extraction of CBM from the same asset.

While taking up these new CBM projects, CIL is also in talks with State-run natural gas logistics and transportation services major GAIL India for a joint venture (JV) for development of existing and future gas projects.

Industry sources state that top officials of CIL and GAIL have held preliminary talks on setting up such a JV in which CIL would focus on the development of projects and the extraction of gas, while GAIL would be tasked with downstream operations leveraging its pan-India gas transportation pipeline network for distribution and sales of the energy resource.

Under tentative plans, the JV would aim at CIL’s on-the-anvil project to connect and offer the energy requirements of 40 districts covering the eastern Indian states of West Bengal, Bihar, Jharkhand and Odisha, wherein CIL-produced CBM would be processed and injected into the network.

Significantly, with the need for a separate licence for the extraction of various coal and hydrocarbons eliminated, and miners enabled to seamlessly develop projects for all categories of hydrocarbons from a single block, the Indian government on Monday launched a fresh auction under the Open Acreage Licensing Policy.

On offer would be 23 blocks across 12 sedimentary basins of which five would be CBM blocks covering an area of 31 000 km² for which bids would be received till April 10.