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Pratim Ranjan Bose

Kolkata, Aug 2 IOC and India’s first commercial CBM producer, Great Eastern Energy Corporation Ltd (GEECL), may set up a 50:50 joint venture for city gas distribution in six places in Burdwan district of West Bengal this month.

The venture will also own and manage the gas transmission and distribution pipeline network along the 100-km stretch between Burdwan and Barakar towns.

The total investment is estimated to be Rs 100 crore.

GEECL has already approached the petroleum regulator for city gas distribution licences in the said locations, which are closer to its CBM production field at Ranigunj.

The licenses, if available, will be transferred to the venture.

While the city gas distribution licence is yet to be awarded, the venture will start selling CNG to automobiles through IOC retail outlets.

According to sources, in a meeting last week, GEECL and IOC finalised the equity structure and other related details regarding the proposed company.

“We have resolved most of the issues last week and are expecting incorporation of the venture this month,” a GEECL source said.

Four IOC outlets along NH-2 near Asansol have been identified for commencing supply of piped CNG for automobiles, the source added.

GEECL currently produces approximately one million cubic ft a day (mcfd) of CBM from 10 producing wells.

The production is estimated to go up to three mcfd (0.08 million standard cubic m a day) by 2007-end.

“We recently firmed up two long-term customers. Besides, SAIL has expressed interest in consuming CBM at its IISCO plant at Burnpur,” the source said.

“Since our main trunk pipeline will pass through Burnpur, we are expecting to firm up gas supplies agreement with IISCO by the end of the fiscal.”

As per the approved development plan, the company is expected to produce 35 mcfd (one mmscmd) of CBM from 100 wells by the end of the first phase of development in 2009-10.

After completion of drilling an additional 200 wells in the second phase, production will hit a plateau rate of over 100 mcfd (three mmscmd).

More Stories on : Alliances & Joint Ventures | Petroleum

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