New Delhi, Nov. 11: ONGC’s ambitious plan to produce coal bed methane (CBM) has run into rough weather in Jharkhand as the state government has still not handed over the land to the company for starting operations.
The Oil and Natural Gas Corporation (ONGC) has already paid around Rs 3 crore to the state government for acquiring land but the process has not picked up pace.
According to sources, some other company with interests in coal mining also want possession of the land and is reportedly in touch with the state government officials. This has delayed the allotment of land to ONGC.
According to the letter of intent placed by ONGC in May this year, the land for 5 well sites and a gas control station was to be given to the company's contractor but this has not been done as the state government has not made the land available to the company.
As a result the contractor has not been able to start executing the turnkey project.
So far, around Rs 100 crore have been spent by ONGC on CBM groundwork in Jharkhand and nearby areas. However, with complications cropping up in the land acquisition process, it is not clear when ONGC will be able to start production originally scheduled for mid-2007.
The ONGC board of directors has approved an investment of Rs 950 crore in exploration and development of six coal bed methane blocks in Bengal and Jharkhand.
The countdown for the first commercial production of coal bed methane in the country has already begun.
An estimated peak production of 7.84 lakh cubic metres of gas per day is being targeted from the proposed wells.
As much as Rs 557 crore of the projected expenditure has been earmarked for the development of early coal bed methane (CBM) production in Central Parbatpur area of Jharia block.
An investment of Rs 392 crore has been approved for drilling, completion and testing of 22 pilot wells in Jharia, Bokaro and North Karanpura CBM blocks, with completion schedule of 31 months.
CBM is a low pressure gas that is normally not transported over long distances but used in the area where it is produced. Like natural gas it can be used to generate power and as a feedstock for fertilisers.