The Hindu Business Line : GE Energy to start CBM production soon

Kolkata June 4 Great Eastern Energy Corporation Ltd (GEECL) - developing Ranigunj coal bed methane (CBM) block in West Bengal - may start commercial production in the next three months.

This is the first time CBM will be produced commercially in the country.

GEECL is targeting an initial production of 1.5 million cubic ft a day and is currently flaring at the rate of over 600 million cubic feet a day.

In talks with IOC

The company is now discussing a joint venture proposal with IndianOil for city gas and CNG marketing and distribution in the industrial cities of Asansol, Raniganj, Durgapur, Kulti and Barakar. This will be the State's first city gas and CNG distribution-marketing project.

While GEECL authorities did not respond to queries, IOC sources told Business Line, "Discussions are under way on the equity structure and other terms and conditions of the proposed joint venture company."

Initially, CNG would be sold through two to three outlets in the region.

Sources said roughly one-fourth of the CBM production (of GEECL) would be routed through the joint venture.

Though GEECL was targeting commercial production much ahead of schedule in June this year, sources said production was now expected to being by August-September.

The Director General of Hydrocarbons (DGH) has already approved a proposal for $150 million field development programme for drilling 100 production wells in four years. Accordingly, the company has completed drilling of over 20 production wells.

Contracts for laying the underground gas pipelines connecting the group gathering stations to the targeted markets in the Asansol-Ranigunj industrial belt are recently awarded.

The estimated gas in place in the block - as per Schlumberger's 2005 report - is 1.386 trillion cubic ft (tcf).

The company's Chairman, Mr Y.K. Modi, previously told Business Line that GEECL was aiming at marketing one-fourth of its peak CBM production through the city gas and CNG projects were undertaken to widen the customer base and despite the fact that the industrial demand in the area far outstrips the projected production of GEECL.

Great Eastern Energy is listed in the Alternative Investment Market segment of the London Stock Exchange. The company has brought in the first FDI in the CBM sector.

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