Natural Gas Asia

Tuesday, March 28, 2017

Indian Parliamentary Panel Recommends Fresh CBM Policy

A parliamentary panel has said that India needs a new current coal bed methane (CBM) exploration policy as the current one has not been able to achieve its objective of production to the promised potential.

Parliamentary Standing Committee on Petroleum and Natural Gas tabled a report in India’s lower house of the parliament on Thursday.

“In view of the newer techniques of assessment and exploration and drilling of CBM have significantly improved, the committee, therefore, feel that there is need to formulate a new comprehensive CBM policy consistent with developments in regulatory regimes and also taking into account the performance of the existing policy,” the report stated.

The current CBM policy was devised in 1997. Four rounds of CBM bidding have been undertaken in the year of 2001, 2003, 2005 & 2008 resulting in award of 33 CBM blocks covering 16,613 sq. km. Current domestic production of CBM is only 1.07 mmscmd in 2015-16 and expected to increase to 5.77 mmscmd by 2017-18.

Recommendations

In committee's view, the new policy should address the current lacuna in coordination among different agencies as well as issues such as simultaneous mining of coal and CBM, evacuation of CBM, use of 40 CBM from existing coal mines, pricing of CBM, making available additional acreages for CBM exploration, etc. “The committee, therefore, recommend that the government should bring out a revised and new CBM policy at the earliest after due consultations with various stakeholders.”

According to the report, previous assessment and prognostication need review and there is an urgent need for reassessment of CBM availability in the country for better understanding of potential. Out of the total 33 blocks awarded, only four blocks have reached to exploration phase and four have been relinquished and 14 are under relinquishment by the operators mostly on account of poor CBM potential. “One reason for poor performance of CBM projects could be the offering of CBM blocks on the basis of inadequate prognostication data about CBM.”

The report also urged the government to award new blocks and re-award the five blocks relinquished due to delay in getting statutory clearances so that work can be started at the earliest. Last time a new block was awarded was in 2008.

It also recommended that the government formulate a separate pricing and marketing mechanism for CBM keeping in mind the variables in operations such as availability of small volume of gas, number of wells required due to low productivity, remote location, dewatering etc. and also to incentivise the CBM producers.

 

`
`