Union coal ministry is of the view that the relinquished coal bed methane (CBM) blocks in the country need to be allotted to power producers as these assets hold substantial reserve of coal.
Owing to inadequate gas reserves, several CBM blocks have been relinquished. But these have potential coal reserves, which can be mined and used for electricity generation, the coal ministry feels.
The government is planning to facilitate captive coal blocks to power producers to meet their fuel requirement.
In this regard, the coal ministry asked the union petroleum ministry to allocate the relinquished CBM blocks. CBM is a form of natural gas drilled from virgin coal beds.
It is learnt that the government allocated blocks for CBM exploration through competitive bidding and 33 contracts were signed. But it is not clear how many of these have been relinquished by the contractors.
CBM blocks have been allocated in Jharkhand, West Bengal, Madhya Pradesh, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Chhattisgarh, Odisha and Assam. All these block areas are rich in coal reserves.
However, commercial production of CBM has only started in Raniganj (South) in West Bengal. Efforts are being made in Sohagpur in Madhya Pradesh and Jharia in Jharkhand to start commercial production at the earliest, said the Directorate General of Hydrocarbons (DGH).