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CIL seeks development partners for two CBM blocks
INDIA
STATE-RUN Coal India Ltd (CIL) has invited bids for two coal-bed methane (CBM) develop- ments, opening the acreages to local and inter- national players
CIL is looking to sign revenue-sharing agreements for the blocks, which are expected to require more than $325mn worth of invest- ment. Adani, Essar and Reliance Industries Ltd (RIL) have reportedly participated in a pre-bid meeting.
CIL subsidiary Bharat Coking Coal Ltd (BCCL) said it was looking for a contractor to explore and develop the Jharia CBM Block-I in the eastern state of Jharkhand and the market the production. The block, which is expected to require INR18.79bn ($248.2mn) worth of investment, holds an estimated 25bn cubic metres of CBM reserves. First production is slated for two years from start of development.
Sister company Eastern Coalfields Ltd (ECL) has offered the Raniganj CBM block in the neighbouring state of West Bengal for exploration, with the project estimated to need INR5.95bn ($78.6mn) worth of investment. The
block is estimated to hold 3 bcm of CBM.
Each project will be developed over three phases – exploration, pilot assessment and mar-
ket survey, then development and production. CIL has appointed its wholly owned Central Mine Planning & Design Institute (CMPDI) as principal implementing agency (PIA) to both
projects to help speed them up.
Local financial daily the Economic Times
quoted an unnamed CIL executive on May 14 as saying that Adani, Essar and RIL had partic- ipated in a pre-bid for the CBM projects. The executive said the company planned to invite bids in the coming week and that CIL was reviewing them.
CIL is under pressure to expand its busi- ness interests following Indian Finance Min- ister Nirmala Sitharaman’s announcement on May 16 that the government intended to break its monopoly over the coal-mining sector. She revealed that the private sector would be able to bid for nearly 50 blocks under a revenue-sharing mechanism.
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India’s LNG imports depend on new pipelines
INDIA
THE US Energy Information Administration (EIA) warned last week that the future growth of India’s LNG imports depended on the timely completion of new gas pipeline networks. This comes as construction of new pipeline capacity to move gas from coastal LNG imports to major inland centres of demand has experienced delays.
The EIA said India’s LNG import capacity had more than doubled over the past 10 years, and expects it to increase by a further third over the next three years as regasification facilities that are currently under construction enter service. Indeed, India has been the world’s fourth-largest importer of LNG since 2011, the agency noted, ramping up imports as domestic production has fallen but consumption has continued rising.
India’s LNG imports accounted for over 50% of the country’s natural gas supply in 2019, up from 31% in 2012. Data for April – when the country’s strict lockdown was imposed – has yet to emerge but it appears that LNG imports continued to grow into March. For that month, they were up 20% year on year, reflecting Indian
buyers trying to take advantage of low LNG spot prices.
In March, India imported 2.9bn cubic metres of LNG, up from 2.4 bcm in the same month of 2019. Government data showed that the regas- ified imports supplied 62% of the gas demand from India’s fertiliser industry, about 52% of city gas, 21% of power generation, 87% of refin- ery demand, 92% of petrochemical and 56% of demand grouped under “other”.
Imports over the 2019-20 fiscal year were up 17.2% y/y, reaching 33.7 bcm, the data showed.
However, the lockdown measures related to the coronavirus (COVID-19) pandemic are expected to put a dent in Indian LNG demand from April, and previous forecasts for 2020 import levels are now being revised downward.
Qatar remains India’s leading LNG supplier, owing in large part to the short distance between the two countries. However, it is also increasingly importing more from the US, and new supply deals between US and Indian companies could be agreed, though buyers are currently hesitant to lock themselves into new contracts.
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