BCCL inks Rs 1,800 cr CBM extraction pact with Prabha Energy

Coal India subsidiary Bharat Coking Coal Limited (BCCL) has entered an agreement with Ahmedabad-based Prabha Energy Pvt Ltd to extract coal bed methane (CBM).

For Jharia Block-I in Jharkhand, the two companies have signed a revenue-sharing contract worth Rs 1,800 crore.

The BCCL will contribute Rs 370 crore to the land cost, with the remaining cost being covered by Prabha Energy, a CBM developer. BCCL is the owner of the block.

Jharia CBM Block-I, according to the company, has a resource of around 25 billion cubic metres (BCM) and a daily production capacity of 1.3 million metric standard cubic metres.

The project will be completed in three stages. The first phase of exploration will last two years after the contract is signed, followed by a three-year pilot phase. The production phase will last for 30 years.

CBM extraction, according to a statement from the company, is part of CIL's diversification portfolio under clean coal initiatives.

The project will be overseen by the consulting arm of CIL, Central Mine Planning and Design Institute(CMPDI).The captured gas can be used for a variety of commercial purposes, according to the company.

GAIL is preparing to commission a gas pipeline in eastern India as part of the URJA Ganga project. The CBM produced could be used for city gas distribution or distributed to potential users via a pipeline.

In a joint venture with state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd, Prabha Energy already has a CBM block in Jharkhand, North Karanpura (OIL).The gas from this block is supposed to be purchased by GAIL, a state-owned company.

ONGC announced in 2018 that it would sell gas from the North Karanpura block to GAIL for $5.56 per MMBTU.

Prabha Energy is a Deep Industries Limited subsidiary that specialises in CBM exploration and production. It has extensive experience in the exploration and production of natural gas from coal bed methane at the upstream, midstream, and downstream levels.

Since the Centre announced a CBM policy in 2005, 33 CBM acreages have been awarded.

ONGC has developed four CBM blocks from these.

After the Union Cabinet waived the requirement for obtaining a separate licence for extracting methane from coal mines in its leasehold areas, CIL decided to venture into CBM extraction in 2018.

The company then identified two CBM extraction projects in West Bengal: Jharia-I and Raniganj.

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Also read: Coking coal imports in India rose to 4.61 mt in July

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