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Three contracts signed to pursue India's energy security

Contracts were signed with three consortiums to tap the gas trapped below coal seams in nine areas, reports M Rajendran.

india Updated: Nov 07, 2006 22:32 IST

In pursuit of India's energy security, the government on Tuesday signed contracts with three consortiums to tap the gas trapped below coal seams in nine areas.

One of them Reliance Natural Resources Ltd, Reliance Energy Ltd and GeoPetrol International Inc signed Production Sharing Contracts (PSC) for four blocks. Australia's Arrow Energy-led group signed agreements for three blocks and, Coalgas Mart-Deep Industries joint venturefor two.

The states of Andhra Pradesh, Chattisgarh, Madhya Pradesh and Rajasthan have two Coal Bed Methane (CBM) blocks each while Jharkhand and West Bengal have one each.The contract for one block—with BP of United Kingdom—is in the process of finalisation, an Oil Ministry official said.

India had formulated the CBM policy in 1997 to harness a new energy source of hydrocarbons from coalfields in the country.

Reliance plans to spend about Rs 100 crore on the project while the Arrow Energy-led group will pump in about$500-600 million (Rs 2250 to Rs 2270 crore) over the next 20 years, officials from the consortiums informed.

Speaking at the signing ceremony, Minister for Petroleum and Natural Gas Murli Deora said,"I am satisfied with the ongoing CBM exploration programme and the first commercial production of CBM in the country is expected to commence in 2007."

He also said that his ministry would interact with the relevant ministries both at the Centre and State to speed up the work programme of the contractors with whom the contracts were being signed.

First Published: Nov 07, 2006 22:32 IST