BP Plc and Italy-based Eni SpA plan to produce the world’s first coal bed methane for liquefaction as global demand expands. BP’s VICO JV signed a production sharing contract with the Indonesian government to extract coal bed methane (CBM) from the Sanga-Sanga block in East Kalimantan. The fuel may be sent through pipelines to the Bontang liquefied natural gas plant. The Southeast Asian nation may hold as much as 450 trillion cu/ft of CBM gas, which is tapped from coal seams by removing water to reduce pressure. BG Group Plc, Conoco Phillips and Santos Ltd are developing similar projects in Australia. BP said that the Indonesian production sharing contract covers 1700sq/km in the Kutai basin and may hold at least 4 trillion cu/ft of potential gas resources. Partners in the project include Japan Petroleum Exploration Co., Osaka Gas Co., Japan Energy Corp. and LNG Japan Corp., a venture between Sumitomo Corp. and Sojitz Corp.
