The Coal Ministry has asked the Ministry of Petroleum and Natural Gas to hand over the relinquished coal bed methane (CBM) blocks that were earlier allocated for exploring gas.
The Coal Ministry wants to re-allocate these blocks with substantial coal deposits to power producers, a top bureaucrat told Business Line .
Both the Ministries have already discussed the issue. On Monday, Coal Secretary Sanjay Kumar Srivastava is expected to send a formal proposal with exact number of blocks to his counterpart Vivek Rae in Ministry of Petroleum and Natural Gas.
“Several CBM blocks have been relinquished because of inadequate gas reserves. But these have potential coal reserves, which can be mined and used for electricity generation,” the Government official said. The Government is targeting to facilitate captive coal blocks to power producers to meet their fuel requirement.
CBM is a form of natural gas drilled from virgin coal beds. According to the Ministry of Petroleum and Natural Gas, which has allocated blocks for CBM exploration through competitive bidding, 33 contracts were signed. It is not immediately known how many of these have been relinquished by the contractors.
CBM blocks have been allocated in Jharkhand, West Bengal, Madhya Pradesh, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Chhattisgarh, Odisha and Assam. All these block areas are rich in coal reserves.
However, commercial production of CBM has only commenced in Raniganj (South) in West Bengal. Efforts are being made in Sohagpur in Madhya Pradesh and Jharia in Jharkhand for commencement of commercial production at the earliest, said the Directorate General of Hydrocarbons.
“From a current level of a total CBM production of 0.15 mmscmd in the country, it is expected to go up to 7.4 mmscmd by the year 2013-14,” the oil regulator said.
At the same time, the Coal Ministry is not willing to go for simultaneous mining of exploring gas and coal in the blocks.
“That has regulatory hurdle. We do not have such licences yet and it would further delay the process. So we can directly allocate the relinquished blocks to power companies,” the Government official said.