Coal India May Produce CBM from Blocks Without Competitive Bidding

Indian government may allow Coal India and its subsidiaries to produce coal-bed methane from their blocks without any competitive bidding.

The state-run firm will be granted an exception to the existing norms that requires the government to invite bids from public and private firms for producing gas trapped in coal seams under the CBM policy, the Economic Times reported. So far, 33 blocks have been awarded to companies such as ONGC, Reliance Industries and Essar in four auction rounds.

Besides CIL, its subsidiaries like Eastern Coalfields Ltd, Bharat Coking Coal Ltd and Mahanadi Coalfields Ltd will also be granted this exception.

Total reserves in India’s 33 CBM blocks awarded under the four auction rounds are estimated to be around 63.8 trillion cubic feet, but so far only 8.92 tcf reserves have been established, the newspaper said in the report citing government officials.

Great Eastern Energy Corp Limited (GEECL) is the only company producing CBM from its Raniganj block in commercial quantity. CBM output from blocks operated by Reliance and Essar are awaiting pricing approval from the government for more than one year.