Coal-bed
methane contracts are similar in principle to exploration and production
concessions in the oil and gas industry.
Coal-bed methane exploration and recovery
Points to be noted:
Coal-bed
methane (CBM) is a clean burning fuel for domestic and industrial
uses, and its extraction reduces explosion hazards in underground
coal mines.
India
is endowed with huge reserves of bituminous coal of Paleozoic
and Tertiary ages within the CBM window at depths of nearly 250-1200
metres.
Lack
of data on producible reserves of CBM, gas content, reservoir
saturation and permeability has prevented full exploitation of
the resource.
India
wants foreign and domestic private companies for the exploration
and commercial exploitation of CBM resources at some of the underground
coal mines.
Contracts
that will be awarded will be similar to the "concession"
concept in oil and gas exploration. Coal-bearing areas will be
leased to the successful bidders and they will have to explore
and test-drill.
If
recovery and commercial exploitation of the CBM gas in these areas
ultimately prove viable, the exploring firms will be free to construct
pipelines and sell the gas to consumers or they may set up gas-based
power plants.