Business Daily from THE HINDU group of publications
Tuesday, Oct 17, 2006
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Business Daily from THE HINDU group of publications Tuesday, Oct 17, 2006 ePaper |
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The estimated expenditure for the first phase of exploration of the three blocks is to the tune of Rs 72 crore, of which GAIL's share would be about Rs 27 crore.
New Delhi , Oct. 16 State-owned gas transmission company GAIL (India) Ltd is likely to invest about Rs 1,125 crore to develop the three coal-bed methane (CBM) blocks that it has won along with its international consortium in the recently concluded third round of CBM bidding. The consortium of Arrow Energy (India) Pty Ltd, GAIL and EIG Energy Infrastructure Group A.B. Ltd have been awarded three blocks with Tata Power Company being consortium partner in two of the three blocks. Mr B.S. Negi, Director, Business Development, GAIL, told newspersons that the total expected capital expenditure for the entire project, with the project duration assumption of 20 years, would be to the tune of Rs 2,250 crore to Rs 2,700 crore, of which GAIL's share would be between Rs 900 crore and Rs 1,125 crore. The estimated expenditure for the first phase of exploration of the three blocks is to the tune of Rs 72 crore, of which GAIL's share would be about Rs 27 crore. The company expects the formalities pertaining to the awarding of the blocks to be completed by next month and exploration activities to start early 2007. Production from the blocks is expected to start in 2011. Out of the three blocks, one block is in Rajmahal coalfield, Jharkhand, and the other two blocks are in Mandraigarh and Tata Pani Ramkola coalfield in Chhattisgarh. As per the Directorate General of Hydrocarbons (DGH), the resource potential of the Rajmahal blocks is 5.5 TCF (trillion cubic feet) and for the Mandraigarh and Tata Pani Ramkola coalfields is 4.2 TCF and 1.9 TCF, respectively. Currently, Arrow is the operator for all the three blocks, but GAIL expects the operatorship to be transferred to it in the long run.
Tech transfer
The consortium is also committed to technology transfer in the field of CBM to India, he added. As an initial arrangement, GAIL plans to depute its technical manpower to Arrow in Australia to gain technical expertise through work association in that country. Besides, GAIL and EIG are in the process of evaluating CBM assets of Arrow in Australia for possible investment. The four assets of Arrow where the Indian consortium may be involved in farm-in activities are in Daandine, Dundee, Clearance Mortan, and Coastal Queensland. The company also has 15 projects where appraisal is going on. Arrow's Chief Executive, Mr Nick Davies, said that the consortium of GAIL and Arrow are eyeing CBM assets in China and Indonesia. CBM is primarily methane gas, which occurs in its natural state in coal or lignite bed seams. It is expected to supplement conventional sources of natural gas.
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