‘New pol­icy may help re­vive in­ter­est in coal bed meth­ane’

Resource Digest - - CONTENT -

OALP and HELP will go a big wai in help­ing to in­crease in­vest­ment in coal-rich In­dia. In­dia has the third-largest re­serves of coal in the world. There­fore, the ex­pec­ta­tion is that there is also a high po­ten­tial for coal bed meth­ane (CBM), said Prashant Modi, CEO of Great East­ern En­ergy Cor­po­ra­tion. The prob­lem so far has been a lack of in­vestor in­ter­est, which should now re­cover due to the new Open Acreage Li­cens­ing Pol­icy (OALP) in­tro­duced by the gov­ern­ment, he said.

“Gen­er­ally, the new pol­icy of OALP and Hy­dro­car­bon Ex­plo­ration and Li­cens­ing Pol­icy (HELP) should help,” Modi said. “They have re­moved the cost re­cov­ery struc­ture, which was a big headache. Rev­enue shar­ing is much cleaner and sim­pler. The other ma­jor is­sue that they cleared par­tially was of pric­ing and mar­ket­ing free­dom.”

“Go­ing for­ward, if it is mar­ket priced... peo­ple will in­vest,” added. “The legacy is­sues are over. The older fields are any­way de­plet­ing. Novem­ber 15 is the first dead­line for the ex­pres­sions of in­ter­est, So let’s see. By the end of De­cem­ber, they will an­nounce who will get what.”


Modi pointed out that there has not been any bidding round in CBM since 2010. “The dis­cov­ered small fields (DSF) bids hap­pened, but I don’t think any of them have pro­gressed up to now,” he added. “From the in­for­ma­tion I have, many of them are al­ready in the mar­ket for sale .... The re­serves will be es­tab­lished once peo­ple start ex­plor­ing,” Modi said.

“There is a lot of coal in In­dia — it has the third largest re­serves in the world. So there is scope for CBM. And if the pol­icy is right, then peo­ple will take the risk. There is enough CBM re­source ac­cord­ing to the gov­ern­ment. The is­sue was that in­vest­ment was not com­ing in.”

Ac­cord­ing to Modi, Great East­ern En­ergy Cor­po­ra­tion was the first in CBM in In­dia, hav­ing started op­er­a­tions in 1993. The com­pany pro­duces 20 mil­lion cu­bic feet of gas per day with 156 wells drilled and `1,600 crore in­vested so far.

He added that given the na­ture of CBM ex­trac­tion, the fuel could be a per­fect fit for SMES.

“As com­pared to con­ven­tional oil and gas and shale, where the pro­duc­tion is the high­est in the be­gin­ning and then goes down, in CBM pro­duc­tion in­creases grad­u­ally till it hits it the peak level, and so it is best suited for SMES which re­quire smaller amounts of fuel,” ex­plained Modi.

And, since CBM is a cleaner and more ef­fi­cient fuel than coal or fur­nace oil, it might lead to sig­nif­i­cant ef­fi­ciency im­prove­ments — of as much as 40% — for such com­pa­nies.

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