Coal India to start producing Coal Bed Methane from Jharkhand under BCCL..

Coal India Limited (CIL) will start producing coal bed methane (CBM) from its leasehold area under Bharat Coking Coal ( BCCL) in Jharkhand. Coal India Limited’s consultancy arm, Central Mine Planning and Design Institute has been involved as the principal implementing agency for the CBM developments in its leasehold areas. The CBM produced may

be used for city gas distribution or distributed through the GAIL gas pipeline, being commissioned under Urja Ganga project, to potential gas users.

As per the project feasibility report, the Jharia CBM Block-I is likely to come up at an investment of Rs 1,880 crore. The Jharkhand CBM block-1 has a resource base of over 26 billion cubic meters (BCM) spread over an area of 27 sq km. Average production capacity having been pegged at 1.3 million metric standard cubic meters per day once the commercial operation kick-starts from 2026, the life span of this methane extraction project have been estimated to be over 25 years.

CIL has already issued a Letter of Acceptance to a CBM developer selected through a global bidding process, this month. It refrained from disclosing the name of the developer stating non-disclosure norms although made it clear that an Indian developer has been awarded the work. The total capital investment will be 20% from BCCL and rest from the developer.

Around 80% of the CBM bearing areas come under CIL. Until 2015, CIL was only allowed to extract coal from its leasehold areas but after receiving the green flag from the Ministry of Petroleum and Natural Gas, it will start the extraction of CBM. The conditions imposed by the Ministry for this are–
1) to not alienate lease rights.

2) to only involve a central or state PSU for exploitation of CBM.
3) majority stake to be held by CIL.

This is the very first time CIL is producing gas from coal seams. After the start of operations, CIL will become the third company after Great Eastern Energy Corporation ( GEECL) and Essar Oil and Gas Exploration and Production ( EOGEPL) to extract CBM from the coal belts of eastern India. It is under CIL’s diversification plan to produce clean energy from coal. CBM extraction will prevent releasing gas into the atmosphere while mining coal. It’ll reduce air pollution, which is a great initiative to save the environment.

CIL also floated two global tenders this month to look for developers for two more CBM projects in Raniganj(WB) and Sohagpur(Chattisgarh) having a combined resource potential of 2.7 BCM.