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Coal Ministry wants re-allocation of CBM blocks to power producers

28 May 2013 Evaluate

To re-allocate coal bed methane (CBM) blocks with substantial coal deposits to power producers, the coal ministry has asked the Ministry of Petroleum and Natural Gas to hand over the relinquished CBM blocks that were earlier allocated for exploring gas. As per the coal ministry, these CBM blocks have been relinquished because of inadequate gas reserves but have potential coal reserves, which can be mined and used for electricity generation.

The government is targeting to facilitate captive coal blocks to power producers to meet their fuel requirement. Both the Ministries have already discussed the issue. As per the Petroleum and Natural Gas Ministry, which has allocated blocks for CBM exploration through competitive bidding, 33 contracts were signed and it is not immediately known how many of these have been relinquished by the contractors.

Meanwhile, at present, the coal ministry is not willing to go for simultaneous mining of exploring gas and coal in these blocks due to the regulatory hurdles, which would further delay the process. So the coal ministry can directly allocate the relinquished blocks to power companies.   

CBM is a form of natural gas drilled from virgin coal beds. It is expected that total CBM production will go up to 7.4 mmscmd by the year 2013-14 from a current level of a total CBM production of 0.15 mmscmd in the country.

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