KARACHI, Dec 23: Sindh cabinet has approved an agreement for exploration of coal-based methane gas in the province.

The cabinet met under the chairmanship of Chief Minister Dr Arbab Ghulam Rahim here on Saturday.Under the agreement, a joint US-Canadian company ‘Soneri’ will carry out a survey of coal reserves with the help of PC-3 Orien aircraft.

An MoU in this regard had been signed on November 27 during President General Pervez Musharraf’s visit to the US.

Briefing newsmen after the cabinet meeting, Advisor to Chief Minister on Information Salahuddin Haider said in the first phase, the company would make an investment of $5 billion.

Since there was no law with regard to gas discoveries, the Sindh government had made some rules, he said, adding that before the enforcement of these rules, the cabinet decided to carry out further scrutiny so as to do away with any legal hitches.

The cabinet, he said, formed a committee comprising secretaries of law; mines and mineral development; and finance and industries to scrutinise the rules and submit a report within two days.

Mr Haider said according to an estimate, there were 25 trillion cubic feet of methane gas reserves in the province. He said methane could be used as piped gas and converted into petrol and diesel.

The company would bring equipment for gas exploration and the Sindh government could levy excise and other taxes which previously was the subject of federal government, he said, describing it as an act of provincial autonomy in some form.—APP