Policy for Early Monetisation of Coal Bed Methane Gas Marketing and Pricing Freedom

Last updated: 2 February 2023

With the aim of promoting the gas economy and developing alternate sources of natural gas, the Cabinet Committee on Economic Affairs released a policy framework to provide marketing and pricing freedom for coal bed methane (CBM) and streamline operational issues. The new guidelines replace the New Domestic Gas Pricing Guidelines of 2014 with respect to CBM. Under the Marketing and Pricing Freedom clause, contractors of CBM blocks may sell CBM at Arm's Length Price in the domestic market. Contractors must ensure a fully transparent and competitive process without any restrictive commercial practices. In addition to establishing pricing freedom, the policy also stipulates guidelines for contractual issues including delays at various project stages, reduction in minimum work programme and designation of authorities to resolve operational issues in contract implementation. 
The recommendations that the policy implements also included:
1) a need for a comprehensive policy for CBM;
2) a technical reassessment of CBM resources in coal blocks;
3) the development of safety guidelines and standard operating procedures for simultaneous CBM and coal extraction.

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