New Delhi: Coal India Ltd (CIL) has agreed to join hands with ONGC to establish " in situ" coal gasification projects. An MoU for this is under formulation under which, both organisations will have equal participation both in terms of investment and benefits.

The coal gasification technology would be established in an area where coal mining may not be cost-effective due to geo-mining difficulties. The gas, which will be extracted, will be used by CIL for generating power. In other words, CIL has plans to enter the power generation business, and the generated power will be sold to the power grid.

It has been decided that the share of CIL in this venture will be in the form of land used and the coal resources utilised.

CIL and ONGC have formed another joint venture to produce coal bed methane. The union government has allocated two blocks, one in Raniganj and the other in the Jharia coalfields on a nomination basis to the consortium of CIL and ONGC. Petroleum exploration licence for both the blocks have been obtained from the respective state governments.

The Central Mine Planning and Design Institute will participate in this joint venture on behalf of CIL.