NTPC will be surprise bidder for CBM-IV blocks

Vol 13, PW 8 (24 Sep 09) Exploration & Production

Companies operating coal bed methane blocks in India take note: state-owned NTPC (National Thermal Power Corporation) is for the first time set to bid for CBM blocks and is looking for a partner.

PETROWATCH learns that in early September, a Kolkata-based independent consultant hired by NTPC visited the CBM dataroom at the DGH office in Noida to evaluate data on 10 CBM blocks on offer in the current licensing round. This consultant submitted his report to NTPC soon after his visit to the dataroom.

“He has listed the blocks in order of priority from one to 10,â€‌ says a source. “It’s up to NTPC to decide how many blocks it will bid for.

â€‌ NTPC wants to enter CBM exploration so it can secure gas supplies for its power plants, according to a company source. He adds it is too early to discuss future plans and that the company is “very seriousâ€‌ about bidding for blocks in the current round.

“We are looking for either an Indian or a foreign company that has experience in CBM, and with which can we can bid jointly,â€‌ adds NTPC. “We can’t bid on our own as we don’t qualify.

â€‌ NTPC hopes to have a bidding partner and to finalise the number of blocks it wants to bid for within a fortnight. But power sector experts doubt that acquiring a CBM block would really ensure â€کenergy security’ for NTPC’s plants.

“I don’t believe CBM is feasible for power generation,â€‌ says an industry expert. CBM has 15-20% less calorific value than natural gas, he says, and illustrates this by telling us that while 3m cm/d natural gas is enough to fire a 660-MW power plant, the same quantity of CBM can generate only 528-MW.

Another major problem with CBM is that production usually tapers off after five-years thanks to high production maintenance costs, but a power plant needs fuel supplies for at least 15-20 years.