Coal India is planning to invite CBM (coal-bed-methane) players to capture methane in the five existing underground mines in the Jharia and Bokaro coalfields in Jharkhand. The project will ensure mine safety while expanding operations and use the captured gas for captive generation or other productive purposes. A tender in this regard will be floated shortly.
While the details of the project are not available, CIL Chairman, Mr N.C. Jha, told Business Line that the project proposed is similar to CBM operations but more expensive and relatively complex.
According to the plan, the coal major will invite operators to degassify the unexplored lower seams of five “gassy” mines and use the captured methane for productive end use on a ‘cost-plus' basis. The project will help CIL increase production from the mines while ensuring safety aspects as well as avoiding the environmental consequences of releasing methane in the air.
The basic process of the proposed project is similar to the CBM activity where operators drill wells in virgin blocks, fracture the coal seams and collect methane for a 25-30 year period.
Complications arise on two counts. Firstly, since the primary aim of the project is to pave the way for mining, gas needs to be pumped out within three-four years, requiring a higher concentration of production wells leading to higher investment.
Moreover, these blocks are already mined. Accordingly, the drilling technology as well as the depth and type of wells differ from a CBM asset. Considering the high capital outlay required in implementing such projects vis-à-vis the limited scope of commercialisation of gas, internationally, mine operators resort to carbon trading as a means to improve the financial benefits of such projects.
In the past, coal miners have used different techniques to dilute the concentration of the mine methane by injecting fresh air and releasing the diluted gas in the air. However, such practices are now discouraged as methane is considered 22 times more harmful for the environment than carbon-dioxide. CIL has already set up a pilot project at Muridih in Jharkhand to capture mine methane and use it for generating electricity.
Private sector initiative
In the private sector Electrosteel Castings Ltd has recently entered into an agreement with the Australia-headquartered Dart Energy for de-gassification of captive Parbatpur block. Electrosteel has entered into a 70:30 JV with Dart for the purpose.
According to company sources, the JV is entrusted with the responsibility of capturing methane from the lower coal seams (upto 600 metre) of the block before Electrosteel starts underground mining between 2015 and 2017. The company is currently sourcing coal through opencast mining in the block.
The JV is scheduled to recover the cost of the project through the sale of gas.