JV likely for coal bed methane projects, may ink marketing pact with Coal India
Gail can also help Coal India supply the produce in eastern states via the Urja Ganga gas pipeline project.
Coal India and Gail have formed a committee of senior executives to work jointly on coal bed methane projects of Coal India on its blocks. They are considering a joint venture in which Coal India would be producing the gas while Gail would be marketing it through its network.
Coal India chairman AK Jha and Gail chairman B C Tripathi met in Kolkata on February 6, 2019, to discuss the proposed projects, company executives said.
The proposed joint venture is likely to enable Coal India to inject coal bed methane into the proposed Urja Ganga gas pipeline that aims to meet energy requirements of 40 districts and 2,600 villages covering Uttar Pradesh, Bihar, Jharkhand, Odisha, and West Bengal.
A Coal India executive said Gail India is interested in downstream processing, transport and selling the gas in bulk to industries. Gail is into the transport of bulk gases and has its own distribution network including pipeline which could be used to sell the product.
“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.
In June last year, the Cabinet Committee of Economic Affairs waived the requirement for procuring separate licenses from the ministry of petroleum and natural gas for taking up coal bed methane projects on its leasehold areas. Following the waiver, Coal India has already lined up investments of Rs 3000 crore for its coal bed methane projects.
The first project will be undertaken by Coal India subsidiary, Bharat Coking Coal, at Jharia coalfields in Jharkhand. This block is estimated to hold methane reserves of 25 billion cubic meters and is expected to start production two years after the project is initiated.
The second project, at Raniganj in West Bengal, is to be undertaken by Eastern Coalfields.