Essar Pumps Rs 5,500 Crore In Coal-Bed Methane Project

Essar Oil and Gas Exploration and Production Ltd (EOGEPL) on Tuesday said coal seam gas (CBM) output from its Raniganj East block in West Bengal has crossed 0.8 million standard cubic meters per day and is on track to triple the production in 24-30 months.

The company was previously handicapped by a lack of a pipeline to take the gas found below coal seams, called coal-bed methane or CBM, to users such as fertilizer plants but that hurdle has now been crossed with the commissioning of state-owned GAIL (India) Ltd's Urja Ganga truck line.

"Our production had to be curtailed to 450,000 standard cubic meters per day but with the commissioning of the pipeline in May 2021, we have been ramping up output. It has now touched 825,000 standard cubic meters per day (0.82 mmscmd)," EOGEPL CEO and Director Pankaj Kalra said.

The company has brought cutting-edge technology that will help ramp up the output to 1 mmscmd by September or October, he said.

"We have already invested about Rs 5,500 crore in the block and plan to drill some 200 more wells in the next 18-20 months. This will help triple output to 2.5-3 mmscmd in 24-30 months' time," he said.

India has been pushing for the production of CBM and other unconventional resources to supplement the availability of natural gas - the feedstock for the generation of power, production of fertilizer, and basis for CNG for automobiles and piped cooking gas for households.

It wants to raise the share of environment-friendly fuel in its primary energy basket to 15 per cent by 2030 from the current 6.7 per cent.

Projects like EOGEPL's Raniganj East will help achieve that target.

"The importance of domestic gas in the energy basket for any developing country like India is extremely crucial considering the uptrend in gas demand, price, and rising import bills. EOGEPL has always led the path and is strategically focused on the development of unconventional hydrocarbons in India," Kalra said.

The delay in the GAIL Urja Ganga trunk line caused numerous challenges for the firm.

"However, steady efforts and technological applications to ramp up gas production to double the production and cross 0.8 mmscmd have brought us back on track. Our next milestone remains 1.0 mmscmd and we are putting concerted effort to reach it at the earliest," he said.

The future ramp-up will be an integration of re-fracturing and revival of wells, alongside fresh technological applications, many of which will boast of its first time application in CBM in India and would be in line with EOGEPL's pioneering endeavors of CBM in the country.

As of now, EOGEPL operates around 350 wells in the block and since May 2021 with a systematic approach of good revival, technology application, and close monitoring, the company has been consistent with the ramp-up forecast, he said.

The field management within the Covid window with various services/logistics limitations had also been a challenge that was successfully mitigated.

Besides CBM, the block has an estimated 8 trillion cubic feet of in-place shale gas reserves which the company plans to tap through by drilling a test well sometime between October 2022 and March 2023, Kalra said adding the globally 20 per cent of in-place shale gas reserves are recoverable (can be brought to production), which gives 1.6-2 Tcf of such reserves in the block.

The block holds 1.1 Tcf (trillion cubic feet) of in-place reserves.

Kalra said the CBM gas is sold to state-owned GAIL at the formula linked to international Brent crude oil prices. The rate currently is $12-12.2 per million British thermal unit.