Govt drafts rules to promote coal bed methane development

The government is drafting regulations to promote extraction of gas trapped in coal seams amid increased demand for the fuel as an alternative to oil, a senior governmental official said.

The government will invite bids from investors to explore for the fuel known as coal-bed methane, Novian M. Thaib, director of oil and gas exploration and production at the Ministry of Energy and Mineral Resources said on Tuesday.

The government will give the first option to develop the fuel to the coal mining company or oil and gas explorer with a concession to drill in an area that may yield coal bed methane, Novian said.

"If the company refuses to exploit the gas, the government will carve out the coal bed methane area from the concession and tender it out," he said.

The new coal-bed methane regulations, which are expected to be completed within three months, will generally be modeled on the oil and gas law, instead of the coal and mineral resources law, Novian said.(Godang)