The consortium of Arrow Energy (India) Pty Ltd, Gas Authority of India Ltd (GAIL) and EIG Energy Infrastructure Group A B Ltd, have been awarded three coal bed methane (CBM) blocks under the recent round of bidding for CBM. The Tata Power Company is also a consortium partner in two of the blocks that have been awarded to the consortium.

GAIL had spearheaded the formation of the consortium for the bidding. Arrow Energy (India) Pty Ltd (subsidiary of Arrow Energy NL of Australia) will be the operator and technology partner, along with EIG Energy Infrastructure Group A B of Sweden. The Tata Power Company Ltd was also a part of the consortium as fourth partner in three out of the seven blocks bid.

Out of the three blocks, one block is in Rajmahal Coal field, Jharkhand and the other two blocks are in Mand Raigarh and Tata Pani Ramkola Coal fields, Chattishgarh.

The consortium structure in the three awarded blocks are as follows:

• RM-CBM-2005 / III: Arrow - 35 per cent, GAIL- 35 per cent, EIG - 15 per cent, Tata Power - 15 per cent
• TR-CBM-2005 / III: Arrow - 35 per cent, GAIL- 35 per cent, EIG - 15 per cent, Tata Power - 15 per cent
• MR-CBM-2005 / III: Arrow - 40 per cent, GAIL - 45 per cent, EIG - 15 per cent, Tata Power - Nil

According to the estimates provided by the director general of hydrocarbons (DGH) the resource potential of the Rajmahal blocks is 5.5 TCF and for the Mand Raigarh and Tatapani-Ramkola blocks are 4.2 TCF and 1.9 TCF respectively.

The estimated expenditure for the first phase of exploration of the three blocks awarded is in the tune of $16 million (Rs72 crore) out of which GIL's share would be around Rs27 crore. Exploration activities are expected to commence in early 2007.

The total expected capital expenditures for entire project spread over an assumed duration of 20 years (five years for exploration plus 15 years of production) is around $500 to $600 million (Rs2,250 crore to Rs2,700 crore) out of which GAIL's share would be around $200 to $250 million (Rs900 to Rs1,125 crore).

Earlier in April 12, 2006, GAIL had entered in to an MoU with Arrow Energy NL, the leading CBM operator in Australia holding substantial CBM acreages in Australia and EIG Energy Infrastructure Group A B, Sweden for joint cooperation in the field of CBM in India, Australia and other countries of mutual interest.

The consortium is also committed to technology transfer in the field of CBM to India. As an initial arrangement the Company plans to depute its technical Manpower to Arrow in Australia to gain technical expertise through work association in Australian CBM.

The Company and EIG are in the process of evaluating CBM Assets of Arrow in Australia for possible investment.