Semirara, Spanish firm eye methane project

The Consunji-led Semirara Mining Corp. is pushing through with negotiations with Endesa Carbono S.L. of Spain on the development of the coal bed methane potential of its mines in Antique as a possible source of natural gas for power generation.

Isidro Consunji, vice chairman of Semirara and president of DMCI Holdings, told reporters that the company intended to pursue the coal bed methane recovery project, which has been in the pipeline for the past few years.

Should this push through, the project will be the first in Asia to capture and destroy coal bed methane from an open-cast mine. Coal bed methane is an emerging natural gas resource that can be extracted from mines where there are extensive, but deep-seated coal resources that could not be economically mined.

The project is expected to cost only $14 million (P602 million) and is estimated to generate a marginal 7 megawatts. Still, the proposed project will be able to provide Semirara Mining with additional revenue stream, a portion of which will translate into tax revenues for the local and national governments.

Semirara, the country’s biggest coal-mining firm, signed a memorandum of agreement with Endesa as early as 2009 for the implementation of a United Nations Framework Convention for Climate (UNFCC) Clean Development Mechanism (CDM) coal bed methane project at the Semirara coal mine in Antique.

Project documents showed that Endesa will be tasked to design, install and maintain a coal mine gas extraction and flaring system, while Semirara will construct a pipeline to take the collected gas to the existing power plant in Semirara and elsewhere. Once completed, a facility is expected to capture the methane currently being released into the atmosphere and use it to fire a power plant.

The report noted that while coal bed methane extraction in underground mines was being practiced in China, there was no known application yet of coal bed methane extraction in open-cast mines anywhere else in Asia.

“The Semirara coal mine [project] will be the first-of-a-kind activity in both the Philippines and in the continent,” the report stated.

Based on the original plan, the construction of the project was expected to begin this year, with the earliest commissioning expected in 2012. Initial project consultation with the local communities was already conducted last year.