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round, ackgBReview of CBM in India, Four Bidding Rounds, CBM Policy, production from CBM blocks.
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Coal Bed Methane in India
Industry Information Insights 2014
Table of Contents
Background
Introduction
CBM Policy
CBM Rounds
Present Status
Production from CBM Blocks
Background
The Ministry of Coal has made CMPDI (Central Mine Planning & Design Institute) nodalagency for development of CMM in India. CMPDI has successfully implemented a CMMdemonstration project at Moonidih mine of Bharat Coking Coal Ltd. (BCCL), funded byGoI/UNDP/GEF. Successful implementation of the project has proved the efficacy of thetechnology of CMM extraction and its utilization in Indian geo-mining conditions.
Based on success of the demonstration project, India has taken steps for identification ofprospective areas for development of CMM projects and coal fields characterized byoccurrence of multi-seams of high rank coals which were considered potential areas for CMMdevelopment.
Introduction
Coal Bed Methane
Coal Bed Methane is a natural gas (methane) absorbed in coal and lignite seams. It is one ofthe eco-friendly sources of energy. To harness this potential source of energy, the Governmentof India approved comprehensive CBM policy for exploration and production of CBM gas inJuly 1997.
Till date, 33 CBM contracts have been signed for exploration of CBM gas. 30 CBM blocks havebeen awarded through international competitive bidding in four rounds of CBM Policy. Twoblocks were awarded on nomination basis and one block through FIPB route.
CBM Policy
To facilitate development of CBM, the Government of India formulated CBM Policy in 1997.The highlights of the policy are:
• Blocks to be awarded through open international competitive bidding system
• No participating interest of the Government
• No upfront payment, No signature bonus
• Exemption from payment of customs duty on imports required for CBM operation
• Freedom to sell gas in the domestic market
• A seven years tax holiday
• 10% royalty payable to the state government
CBM - I
In May 2001, for the first time in India, Government offered 7 blocks under 1st round of CBMbidding, out of which 5 blocks were awarded and contracts were signed. Contracts foranother 3 blocks awarded on nomination basis were also executed.
Block Name State Operator
RG(E)--CBM~2001/l West Bengal Essar Oil
BK-CBM-2001/1 Jharkhand ONGC
NK-CBM-2001/1 Jharkhand ONGC
SP(E)-CBM-2001/I Madhya Pradesh RIL
SP(W)-CBM-2001/l Madhya Pradesh RIL
CBM - II
Under 2nd round of CBM bidding, 9 blocks were offered through international competitivebidding in May 2003. A total of 14 bids were received for 8 out of 9 blocks offered. Contractsfor these 8 awarded blocks were signed in June 2004.
Block Name State Operator
SK-CBM-2003/II Jharkhand ONGC
NK-(W)-CBM-2003/Il Jharkhand ONGC
ST-CBM-2003/II Madhya Pradesh ONGC
SH(N)-CBM-2003/II Chattisgarh RIL
BS(l)CBM-2003/II Rajasthan RIL
BS(2)-CBM-2003/II Rajasthan RIL
WD-CBM-2003/II Mahashtra ONGC
BS(3)-CBM-2003/II Gujarat ONGC
CBM - III
International competitive bids were invited by the Government of India for 10 CBM blocksunder 3rd round of CBM bidding in 2006. For the first time major foreign E&P companiesparticipated. A total of 54 bids were received for all the 10 blocks, from 26 companiesincluding 8 foreign and 18 Indian companies. Multiple bids were received for all the 10blocks.
Block Name State Operator
BB-CBM-2005/III West Bengal BPE
RM-CBM-2005/III Jharkhand Arrow
SP(N)-CBM-2005/III Madhya Pradesh GEO-PETROL
SR-CBM-2005/III Madhya Pradesh Coal Gas
TR-CBM-2005/III Chattisgarh Arrow
MR-CBM-2005/III Chattisgarh Arrow
BS(4)-CBM-2005/III Rajasthan GEO-PETROL
BS(5)-CBM-2005/III Rajasthan GEO-PETROL
KG-(E)-CBM-2005/III Andhra Pardesh GEO-PETROL
GV(N)-CBM-2005/III Andhra Pardesh Coal Gas PETROL
CBM - IV
The fourth bid round of Coal Bed Methane Policy was launched in April, 2009. 10 blockscovering an area of about 5000 Sq. Km. were offered in CBM-IV. 27 bids were received for 8blocks under CBM-IV.
Out of eight blocks, multiple bids were received in respect of 7 Blocks and single bid wasreceived in respect of Block SR(W)-CBM-2008/IV in Madhya Pradesh. No bids were receivedin respect of two CBM Blocks located in Wardha Coalfield of Maharashtra.
Block Name State Operator
RM(E)-CBM-2008/1V Jharkhand Essar Oil Limited
TL-CBM-2008/IV Odisha Essar Oil Limited
IB-CBM-2008/IV Odisha Essar Oil Limited
SP(ME)-CBM-2008/IV Madhya Pradesh Essar Oil Limited
ST-CBM-2008/IV Madhya Pradesh Dart Energy - Tata Power
AS-CBM-2008AV Assam Dart Energy - Oil India
MG-CBM-2008/IV Tamil Nadu GEECL
CBM - IV
Under 4th round of CBM bidding, 10 blocks were put on offer through internationalcompetitive bidding. A total of 27 bids were received for 8 blocks from 19 companiesincluding 3 foreign companies.
These bids were opened on 12 October, 2009. Deep Ch IV Pvt. Ltd. turned out to beprovisional winner for 7 out of 8 blocks in consortium with different partners. The remaining1 block was awarded to Essar Oil Limited.
However, after evaluation, ECS rejected all the bids submitted by Deep as it did not furnishessential documents along with the bids within the bid submission date.
Accordingly, the blocks were awarded to the second rank bidder. Out of the 7 blocks, 4 wereawarded to Essar Oil, 1 block to GEECL and the remaining 2 blocks to Arrow Energy inconsortium with OIL and TPCL. The contracts for all the seven blocks were signed on 29 July,2010.
Present Status of CBM
Blocks Awarded
A total of 33 CBM blocks have been awarded so far, out of which 3 blocks have beenrelinquished by the contractors, citing poor prospects.
Under CBM-II Round held during 2004, ONGC was awarded 5 CBM blocks. Out of these,ONGC has relinquished 3 blocks, namely ST-CBM-2003/II, WD-CBM-2003/II and BS(3)-CBM-2003/II, on the ground of poor prospectivity, after completing the Minimum WorkProgramme (MWP) of drilling coreholes/test wells under Exploration Phase-I.
CBM Reserves
CBM reserve of 9.12 Trillion Cubic Feet (TCF) has been established in 6 CBM blocks in thestates of West Bengal (2), Jharkhand (2) and Madhya Pradesh (2).
Two CBM blocks in West Bengal, operated by ONGC (Oil & Natural Gas Corporation Ltd.)and EOL (Essar Oil Ltd.), are under exploration phase.
CBM Production
Commercial production of coal bed methane (CBM) in India started from 14 July, 2007 fromRaniganj (South) block in West Bengal operated by Great Eastern Energy Corporation Ltd.(GEECL).
Presently CBM gas is being produced by 3 Operators - Great Eastern Energy CorporationLimited (GEECL), Essar Oil Ltd. and Oil & Natural Gas Corporation (ONGC) from RaniganjSouth, Raniganj East and Jharia CBM blocks respectively. Reliance Industries Ltd. (RIL) plansto start production of natural gas from Sohagpur CBM block in Madhya Pradesh from 2015-16.
Year CBM Production (MMSCM)
2007-08 14.25
2008-09 13.103
2009-10 38.402
2010-11 41.362
2011-12 84.191
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