8 Coal Bed Methane Blocks Up For Sale
The petroleum ministry has decided to offer eight exploration blocks in the first round of bidding for coal bed methane.
Most of these blocks are located in Bihar while some are in the coal-bearing areas of Madhya Pradesh.
In addition to these eight blocks, the Parbatpur block in the Jharia coalfields area of Bihar is expected to be given jointly to Coal India Ltd (CIL) and Oil and Natural Gas Corporation (ONGC) on a nomination basis. The ministry's decision to recommend the Parbatpur block for exploration by CIL and ONGC stems from the fact that ONGC is already working on the block for some time now and has invested heavily in it.
The first round of bidding for coal bed methane blocks is expected to be launched around December this year. The process of receiving the bids, their evaluation and the final award of contracts is expected to take another nine months.
Therefore, the exploration work at these blocks is expected to start only towards the end of next year.
India has 200 billion tonnes of coal reserves having a potential for 800 billion cubic metres of coal bed methane resources.
The resource base could be much bigger considering some preliminary assessment of absorption capacity of Damodar valley coal as well as coal in the Cambey basin. According to geologists, coal bed methane resources of this magnitude can support a long-term gas production rate of 40 to 50 million standard cubic metres per day, which is equivalent of current level of natural gas production in India.
The technology for coal bed methane exploitation is broadly identical to the technology used for oil and gas production. The only difference is that methane gas does not stay as free gas in sand or limestone reservoirs but exist as absorbed natural gas in coal's molecular structure.
The de-watering of coal seams leads to natural gas being absorbed from coal and flows to the well bore via a network of small fractures called cleats and through artificially induced fractures using the stimulation technique of "hydro-fracturing".
The government has drawn up an action plan for coal bed methane exploration. The plan includes:
* Laboratory, field and pilot studies in proven coal-bearing formations and sedimentary basins to evaluate the production potential of coal bed methane, economics and resources.
* Exploration through deeper drilling (up to 1500 metres) in known coal-bearing sedimentary basins in order to assess the coal bed methane potential beyond the explored levels by agencies like CIL and the Geological Survey of India (GSI), which are concerned with shallow coal deposits.
* Identification of coal seams and assessment of coal bed methane potential in some of the wells drilled by ONGC and Oil India Ltd in known coal-bearing sedimentary basins.
* Accelerated programme for coal bed methane exploration to be introduced by inviting foreign and Indian private oil and gas companies with expertise in coal bed methane production through specially tailored rounds.