Great Eastern Energy Corporation is the first private sector company to take up coal bed methane exploration in India. Y.K. Modi talks to Mrinalini Prasad on why coal bed methane is poised to emerge as a cleaner route to India's energy security.

What challenges did you face as the first private company to enter coal bed methane exploration?
GEECL is part of YKM Holding Group; in December 2005, it became the first Indian company to get listed on the London Stock Exchange's Alternative Investment Market. Our effort is to maintain ecological balance in West Bengal's coal-bearing areas where methane gas is escaping and depleting the ozone layer. Our objective is de-methanation of coal beds to preserve the ozone layer.
As the first private Indian company to enter coal bed methane exploration, we do have challenges. There is lack of CBM-related services in India, but that is changing as the volume of work increases.
Describe major projects underway and future plans.
GEECL is exploring and developing production wells for CBM in Raniganj coalfields of West Bengal. The licensed area is 210 sq. km (approximately 52,000 acres). This would lead to de-methanation of coal beds and avoidance of methane emissions into the atmosphere - thus turning an environmental hazard into a clean energy resource.
In phase-I, 100 production wells will be drilled and completed. A five-well cluster pattern will be followed for CBM block development. We are exploring the option of drilling directional or deviation wells, which could reduce the number of wells required and also increase recovery as well as production rate. The wells will be connected by an internal pipeline network going into appropriate gas-gathering stations.
To take advantage of any future technological advancement to augment gas production and recovery from CBM block, the company may drill an additional 200 wells in a phased manner.
How much CBM do you produce now and what is your target for 2008-09?
The gas in place in the block is 1.92 tcf (trillion cubic feet) as per Netherlands, Sewell and Associates, Inc. Commercial drilling of CBM wells started in January 2006, and commercial production started for the first time in India on July 14, 2007. The project involves drilling up to 300 wells with an estimated investment of $1 billion in upstream, midstream, and downstream activities.
What is your view on the current gas market and gas pricing?
Currently, gas demand exceeds supply by 30 per cent. With the gap widening, India is in urgent need of more gas. The country is also the third largest producer of coal in the world and has massive quantities of associated coal bed methane. With the nation requiring higher energy sources to sustain development pace, CBM will play an important role as one of the prime energy sources for future generations.
How do you assess CBM potential?
As the third largest coal producer in the world, India has good prospects for commercial production of coal bed methane. Nevertheless, with demand for gas rising sharply, CBM will have to compete with imported (liquefied) natural gas. Methane is, however, a viable alternative to compressed natural gas (CNG) and its use as automotive fuel will certainly help reducing pollution levels.
India is one of the select countries which have undertaken steps through a transparent policy to harness domestic CBM resources. The Centre has received an overwhelming response from prospective producers with several big players starting operations on exploration and development of CBM in India.
It is envisaged that in India operational CBM fields may contribute about 8-10 mmscmd of gas production in the next five years. Investment in coal and gas transportation infrastructure, including gas gathering, transportation and distribution, is necessary to fill the gap and move CBM from coal fields to local and more distant end-use markets which include rural and commercial power generation and transportation fuels.
What is the road ahead for CBM?
India is set to become the fourth after US, Australia and China in terms of exploration and productionof coal bed methane. In order to fully develop India's CBM potential, delineation of prospective CBM blocks is necessary. There are other measures like provision of technical training, promotion of research and development, and transfer of CBM development technologies that can further the growth of the sector.
With growing demand and rising oil and gas prices, CBM is definitely a viable alternative supplementary energy source. Moreover, CBM extraction also potentially offers the opportunity of earning carbon credits under Clean Development Mechanism of Kyoto Protocol, being an environmentally friendly fuel. Coal bed methane will clearly emerge as the one of the viable and clean routes to India's energy security.