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Govt to sign CBM contracts tomorrow

November 06, 2006 17:57 IST
The government will sign contracts on Tuesday for exploitation of gas trapped below coal seams in nine areas with three consortia, including one led by Anil Ambani Group companies.

On September 29, the Cabinet Committee on Economic Affairs had awarded 10 Coal Bed Methane blocks, but contracts for only nine have been finalised. The agreement for one block with BP of UK has not been firmed up, official sources said.

The consortium of Reliance Natural Resources Ltd-Reliance Energy Ltd-GeoPetrol International Inc will sign production sharing contracts for four blocks.

Australia's Arrow Energy-led group would ink the pact for three blocks, while Coalgas Mart-Deep Industries joint venture would sign PSC for two blocks.

An RNRL official said
the CBM venture for the Anil Ambani Group was part of its strategy of backward integration. Being a power producer, it was logical for the Group to foray into fuel side.

"CBM is a good and efficient fuel for generating power," he said.

While RNRL would look after exploration side, Reliance Energy Ltd would be responsible for utilising the CBM for power generation.

GeoPetrol is the operator of the consortium.

"We will be investing close to Rs 100 crore (Rs 1 billion) in the initial phase of exploration in the four CBM blocks," the official said, sounding optimistic about finding gas.

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