The project was first announced in February when Colombian Mines and Energy Minister Amylkar Acosta said the two companies would work in a joint venture to develop the CBM reserves.
The project will be developed in Cerrejon’s mining district where Drummond holds the right to produce methane gas.
Cerrejon and Drummond are the leading coal producers in Colombia.
Cerrejon, jointly owned by BHP Billiton, Anglo American and Glencore Xstrata, produced 33 million tonnes of coal last year.
Colombia included CBM in its tender for oil and gas exploration and production contracts for 2014.
