Coal India to Be Soon Allowed to Extract CBM

Coal India (CIL) may soon be allowed to extract coal-bed methane (CBM) from its leasehold mining areas soon, India’s Deccan Chronicle newspaper reported Sunday.

Current rules do not allow coal miners to extract methane during the mining process.

Sources in the government told Financial Chronicle that the oil ministry has finalised a comprehensive note for the cabinet committee on economic affairs (CCEA) seeking amendment of the CBM policy.

The amendment would make it possible for miners like Coal India to explore CBM as well price and market the gas.

Under the existing CBM policy, the pricing of gas generated from blocks auctioned during NELP rounds is done according to the government-administered norms and marketing regulations. The price of gas is fixed at $5.6 per million British thermal units (mmBtu) and its sale is regulated under a gas allocation policy.

“We expect the cabinet to clear the new CBM policy before the end of the month. The policy would allow CBM contractors to sell gas based on price bidding without pre-emptive allocation,” a petroleum ministry official told the newspaper.