Oil & Natural Gas Corporation has offered 26 per cent equity stake to Coal India for the proposed joint venture for carrying out underground coal gassification.

It is learnt that ONGC would initially offer 10 per cent equity stake that will progressively grow to 26 per cent.

ONGC has already tied up with Stochinsky Institute of Russia for sourcing technology for underground coal gassification. UGC is a process of extracting coal gases like hydrogen, methane and carbon dioxide that are trapped in coal deposits, beyond a depth of 500 metres. Currently, Indian technology cannot mine coal beyond 400m, resulting in over two-thirds of the coal deposits lying unexploited.

Meanwhile, ONGC is also progressing well with its coal bed methane project in Jharkhand, with gas flows of 6,000 cubic metres per day encountered. The Jharia coalfield at Parbatpur in Jharkhand was offered to the ONGC-CIL combine under the first bidding round of the Coal Bed Methane Policy in February 2003. The total reserves in the Jharia field is estimated at 85 billion cubic metres.

In the first round of bidding under the CBM policy, the government signed a total of eight contracts including three in Jharkhand, two in Madhya Pradesh and three in West Bengal. The total CBM resource in these eight blocks is estimated at 400 billion cubic metres and the production potential in these blocks is 13 mmscmd.  The investment envisaged in the exploration phase of these blocks is around Rs.250 crore.