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Development of CBM Blocks May Reduce Natural Gas Import for India

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Government is likely to offer six coal bed methane (CBM) blocks, all in Gujarat, under 5th round of auction this fiscal, a senior oil ministry official said. 

Source: ET

SNP Infra Research

Government decision to improve coal seam gas (CBM Gas) production from CBM blocks will reduce India’s dependency on import of natural gas. Presently CBM gas production facility (38.412 mmscd) available in the country is nearly 15.8% of the total available reserve capacity (242.112 mmscd). If CBM gas production will achieve its full potential then it may full fill 45% of India’s total natural gas demand. Also it may help the gas based power plants, fertilizer and other natural gas dependent process industries to find cheap and required fuel supply. Also this may  create opportunity for power companies to devlop power plants near these blocks. This may reduce the generation cost and make these project more viable. Also this may improve investment in gas base power plant devlopment in the country which are more cleaner source of power generation than coal based power plants. So, properly designed business environment for CBM Block development may attract more investment towards the sector and may work towards energy security of the country.

Source: SNP Infra Research