India’s coal bed methane (CBM) production has increased by 6% y-o-y to 683 million standard cubic meters (MMSCM) in the financial year (FY) 2021-22, as per data provided by the Directorate General of Hydrocarbons (DGH). Up to FY22, cumulative CBM production has reached 5,068 MMSCM.
CBM refers to the clean energy source extracted in the form of natural gas from coal seams. The rise in production volume holds significance as it ended the successive decline recorded for the past three fiscals.
The government has emphasised upon expediting exploration of CBM blocks so as to reduce domestic availability of natural gas and reduce supply-demand gap.
As part of the development plan, a total of 33 CBM blocks were awarded across the four rounds of bidding process held between 2001-2008. These include two blocks which were awarded on nomination basis and one under foreign investment promotion board route.
The most recent auction took place under Special CBM Bid Round 2021, where four additional CBM blocks have been awarded to the successful bidders.
Currently, commercial production has begun at Raniganj South, Raniganj East, Sohagpur West and Bokaro blocks. In addition, incidental CBM gas is being produced during testing of CBM wells in Jharia and Sohagpur East.
New round of sale
The government has launched fresh round of auction under ‘Special CBM Bid Round 2022’ for 16 CBM blocks that are spread over Madhya Pradesh, Chhattisgarh, Telangana, Maharashtra, Odisha, Jharkhand and West Bengal.
These blocks cover an area of 5,817 square kilometers (km) and possess CBM resource of around 500 billion cubic meter (BCM).
The salient features of the sales include marketing and pricing freedom, single licence to cover both conventional and unconventional hydrocarbon resources, availability of gas pipeline infrastructure and extensive access for exploration activity throughout the contract period.
Bid submission for this round will start on 1 February, 2023 and end on 17 March, 2023.
The government has informed that CBM production is expected to reach 759 MMSCM in FY23 and will be gradually scaled up to 1,072 MMSCM in FY24 and 1,508 MMSCM by FY25.
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