CIL’s BCCL signs first-of-its-kind Rs 1,880-cr contract for CBM extraction

• The contract is worth around Rs 1,880 crore tentatively and involves the extraction of CBM from Jharia Block I under leasehold area of BCCL
• The first phase of exploration will have a duration of two years from the signing of the contract, followed by the pilot phase of three years

New Delhi: Bharat Coking Coal Limited (BCCL), a subsidiary of Coal India Ltd (CIL), has signed a first-of-its-kind revenue sharing contract on Monday with CBM developer Prabha Energy Private Limited for the commercial extraction of coal bed methane (CBM), an official statement released by CIL said. The contract is worth around Rs 1,880 crore tentatively and involves the extraction of CBM from Jharia Block I under leasehold area of BCCL. Prabha Energy Private Limited was selected through a global bidding process, CIL said.

While BCCL would contribute close to Rs 370 crore towards the cost of the land, the rest of the cost will be borne by the CBM developer. CIL has assigned CMPDI, its Ranchi-based consultancy arm, as the principal implementing agency to oversee the project. 

Jharia block expected to produce 1.3 MMSCMD of CBM 

CIL Chairman Pramod Agrawal and Binay Dayal, Director (Technical) of CIL, were virtually present during the inking of the contract. "This is an important development and with this, CIL would be stepping into a new era of CBM extraction on its own in its leasehold area," said a senior official of CIL.

Spread over an area of approximately 27 square Km, Jharia CBM Block-I has resource of around 25 Billion Cubic Metres (BCM). Average production capacity is pegged at 1.3 million metric standard cubic metres per day (MMSCMD) once the commercial operation kick starts. 

CBM project to be executed in 3 phases

The project is scheduled in three phases. The first phase of exploration will have a duration of two years from the signing of the contract, followed by the pilot phase of three years. Thereafter, the production phase is for 30 years. "With the vast experience that the CBM developer has, CIL is hopeful that the first two phases would be completed earlier than scheduled and production would commence sooner than planned," said the statement.

CBM extraction part of CIL's diversification plan

CBM extraction is part of CIL's diversification portfolio under clean coal initiatives. Harnessing CBM has dual advantages. Methane has energy potential, and the captured gas can be put into use for many commercial uses. The commissioning of gas pipeline in eastern India under URJA Ganga project is in the works by GAIL. CBM produced may be used for city gas distribution or through pipeline for potential users.  

Also, methane is a potent green house gas with global warming potential greater than 25-28 times compared to CO2 and is a cause of concern for the safety of mines and environment.  "Removing fugitive methane gas from UG coal mines and using it in profitable and practical ways can enhance safety, mine productivity, increase revenues and reduce Green House Gas emissions," said CIL.

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