Business Daily from THE HINDU group of publications
Tuesday, Jul 17, 2007
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Business Daily from THE HINDU group of publications Tuesday, Jul 17, 2007 ePaper |
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Corporate
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Outlook Industry & Economy - Petroleum States - West Bengal Great Eastern Energy begins CBM production
The block is located adjacent to Asansol industrial city offering the company ample opportunity to sell CBM locally. The company has also commenced CNG supplies (with 96 per cent methane content) through six stations in and around Asansol.
Pratim Ranjan Bose Asansol, July 16 Great Eastern Energy Corporation Ltd (GEECL) plans to raise Rs 300-350 crore ($83-88 million) loan finance from domestic and foreign sources to complete the first phase of development of Ranigunj CBM block. The company - listed in the AIM segment of the London Stock Exchange - has earned the reputation of pioneering the commercial production of coal bed methane (CBM) in India from its Ranigunj block in West Bengal. “We have already invested approximately Rs 175 crore through equity in drilling 23 production wells. Current production is roughly 760 thousand cubic feet a day. We are expecting the production to touch 1.5 million cubic feet a day (mcfd) shortly,” company Chairman, Mr Y.K. Modi, told newspersons here. “We are now planning to raise Rs 300-350 crore from the debt market in India and overseas for completing the first phase development comprising a total of 100 production wells with an estimated production of 35 mcfd within next two years. The total investment is expected to be Rs 575 crore,” he said. The company has already appointed lead managers for loan syndication services. So far a debt free company, GEECL has an equity of Rs 203 crore including $19 million raised through GDR in the AIM segment. The company has a notional market capitalisation of £176 million. The 210-square km nomination block is located adjacent to Asansol industrial city offering the company ample opportunity to sell CBM locally. To begin with, GEECL will enter into two firm supply agreements with a local ceramic manufacturer and bakery for replacing liquid fuel with CBM next week. The company has also commenced CNG supplies (with 96 per cent methane content) through six stations in and around Asansol. CNG is priced at Rs 30 a kg. A joint venture proposal is currently being worked out with IndianOil for transfer of the piped city gas distribution business including the distribution pipelines.
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