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Coal India, GAIL to set up JV for coal bed methane projects

Coal India, producing over four-fifths of India’s coal output, is set to generate the gas while the gas distribution company will likely market it through its network 

Coal India, GAIL to set up JV for coal bed methane projects

Kolkata: State-owned Coal India Ltd (CIL) and Gas Authority of India Ltd (GAIL) are coming together to work on a joint venture for the development of coal bed methane projects of CIL on its blocks. A committee of top executives has been formed to facilitate the project. Coal India, producing over four-fifths of India’s coal output, is set to generate the gas while the gas distribution company will likely market it through its network. To discuss the proposed projects, Coal India chairman AK Jha and Gail chairman BC Tripathi met in Kolkata earlier this week, according to company executives.

Proposed JV

The joint venture that has been proposed will possibly allow Coal India to inject coal bed methane into the planned Urja Ganga gas pipeline. The pipeline is aimed to meet the energy needs of 40 districts and 2,600 villages covering Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal. GAIL India is interested in downstream processing, selling and the transport of the gas in bulk to industries, a Coal India executive said.

The gas distribution company has its own distribution network which could be used to sell the produce. “GAIL can also help Coal India supply the produce in eastern states via the Urja Ganga gas pipeline project since it is being undertaken by a consortium of state-run companies headed by GAIL,” the executive said.

Separate licenses for coal bed methane projects waived

The Cabinet Committee of Economic Affairs in June did away with the requirement for obtaining separate licences from the ministry of petroleum and natural gas for taking up coal bed methane projects on its leasehold areas. In the coming four to five years, government officials believe the country’s coal bed methane production will likely increase to 5 million cubic metres per day (cmpd) from the current 2 million (cmpd).