Coal Bed Methane in India, Policies, CBM Rounds, Production from CBM Blocks, Present Status

1. Coal Bed Methane in India
Industry Information Insights 2014

2. Table of Contents
Background
Introduction
CBM Policy
CBM Rounds
Present Status
Production from CBM Blocks

3. Background
TheMinistryofCoalhasmadeCMPDI(CentralMinePlanning&DesignInstitute)nodalagencyfordevelopmentofCMMinIndia.CMPDIhassuccessfullyimplementedaCMMdemonstrationprojectatMoonidihmineofBharatCokingCoalLtd.(BCCL),fundedbyGoI/UNDP/GEF.SuccessfulimplementationoftheprojecthasprovedtheefficacyofthetechnologyofCMMextractionanditsutilizationinIndiangeo-miningconditions.
Basedonsuccessofthedemonstrationproject,IndiahastakenstepsforidentificationofprospectiveareasfordevelopmentofCMMprojectsandcoalfieldscharacterizedbyoccurrenceofmulti-seamsofhighrankcoalswhichwereconsideredpotentialareasforCMMdevelopment.

4. Introduction
CoalBedMethane
CoalBedMethaneisanaturalgas(methane)absorbedincoalandligniteseams.Itisoneoftheeco-friendlysourcesofenergy.Toharnessthispotentialsourceofenergy,theGovernmentofIndiaapprovedcomprehensiveCBMpolicyforexplorationandproductionofCBMgasinJuly1997.
Tilldate,33CBMcontractshavebeensignedforexplorationofCBMgas.30CBMblockshavebeenawardedthroughinternationalcompetitivebiddinginfourroundsofCBMPolicy.TwoblockswereawardedonnominationbasisandoneblockthroughFIPBroute.

5. CBM Policy
TofacilitatedevelopmentofCBM,theGovernmentofIndiaformulatedCBMPolicyin1997. Thehighlightsofthepolicyare:
•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

6. CBM -I
InMay2001,forthefirsttimeinIndia,Governmentoffered7blocksunder1stroundofCBMbidding,outofwhich5blockswereawardedandcontractsweresigned.Contractsforanother3blocksawardedonnominationbasiswerealsoexecuted.
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

7. CBM -II
Under2ndroundofCBMbidding,9blockswereofferedthroughinternationalcompetitivebiddinginMay2003.Atotalof14bidswerereceivedfor8outof9blocksoffered.Contractsforthese8awardedblocksweresignedinJune2004.
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

8. CBM -III
InternationalcompetitivebidswereinvitedbytheGovernmentofIndiafor10CBMblocksunder3rdroundofCBMbiddingin2006.ForthefirsttimemajorforeignE&Pcompaniesparticipated.Atotalof54bidswerereceivedforallthe10blocks,from26companiesincluding8foreignand18Indiancompanies.Multiplebidswerereceivedforallthe10blocks.
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

9. CBM -IV
ThefourthbidroundofCoalBedMethanePolicywaslaunchedinApril,2009.10blockscoveringanareaofabout5000Sq.Km.wereofferedinCBM-IV.27bidswerereceivedfor8blocksunderCBM-IV.
Outofeightblocks,multiplebidswerereceivedinrespectof7BlocksandsinglebidwasreceivedinrespectofBlockSR(W)-CBM-2008/IVinMadhyaPradesh.NobidswerereceivedinrespectoftwoCBMBlockslocatedinWardhaCoalfieldofMaharashtra.
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

10. CBM -IV
Under4throundofCBMbidding,10blockswereputonofferthroughinternationalcompetitivebidding.Atotalof27bidswerereceivedfor8blocksfrom19companiesincluding3foreigncompanies.
Thesebidswereopenedon12October,2009.DeepChIVPvt.Ltd.turnedouttobeprovisionalwinnerfor7outof8blocksinconsortiumwithdifferentpartners.Theremaining1blockwasawardedtoEssarOilLimited.
However,afterevaluation,ECSrejectedallthebidssubmittedbyDeepasitdidnotfurnishessentialdocumentsalongwiththebidswithinthebidsubmissiondate.
Accordingly,theblockswereawardedtothesecondrankbidder.Outofthe7blocks,4wereawardedtoEssarOil,1blocktoGEECLandtheremaining2blockstoArrowEnergyinconsortiumwithOILandTPCL.Thecontractsforallthesevenblocksweresignedon29July, 2010.

11. Present Status of CBM
BlocksAwarded
Atotalof33CBMblockshavebeenawardedsofar,outofwhich3blockshavebeenrelinquishedbythecontractors,citingpoorprospects.
UnderCBM-IIRoundheldduring2004,ONGCwasawarded5CBMblocks.Outofthese, ONGChasrelinquished3blocks,namelyST-CBM-2003/II,WD-CBM-2003/IIandBS(3)-CBM- 2003/II,onthegroundofpoorprospectivity,aftercompletingtheMinimumWorkProgramme(MWP)ofdrillingcoreholes/testwellsunderExplorationPhase-I.
CBMReserves
CBMreserveof9.12TrillionCubicFeet(TCF)hasbeenestablishedin6CBMblocksinthestatesofWestBengal(2),Jharkhand(2)andMadhyaPradesh(2).
TwoCBMblocksinWestBengal,operatedbyONGC(Oil&NaturalGasCorporationLtd.) andEOL(EssarOilLtd.),areunderexplorationphase.

12. CBM Production
Commercialproductionofcoalbedmethane(CBM)inIndiastartedfrom14July,2007fromRaniganj(South)blockinWestBengaloperatedbyGreatEasternEnergyCorporationLtd. (GEECL).
PresentlyCBMgasisbeingproducedby3Operators-GreatEasternEnergyCorporationLimited(GEECL),EssarOilLtd.andOil&NaturalGasCorporation(ONGC)fromRaniganjSouth,RaniganjEastandJhariaCBMblocksrespectively.RelianceIndustriesLtd.(RIL)planstostartproductionofnaturalgasfromSohagpurCBMblockinMadhyaPradeshfrom2015- 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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