The Hindu Business Line : Essar’s Raniganj block likely to begin gas output by year-end

Kolkata, May 31 Having successfully completed exploratory (core hole) drilling, Essar Exploration and Production Ltd — a wholly owned subsidiary of Essar Oil Ltd — has begun developing the Raniganj-East coal-bed methane (CBM) block in West Bengal for commercial production of gas.

The block, located approximately 150 km from Kolkata near the steel city of Durgapur in Burdwan district,is expected to start producing CBM in end 2008-09.

Oldest zone

Raniganj is the country’s oldest coal-mining zone.

“We have spudded the first production well at Raniganj on May 30. In the first phase, we will drill 15 production wells in the 500 sq km block in six months . Gas is expected to start flowing by the end of this year,” a senior company official told Business Line.

Essar E&P owns 100 per cent interest in the block and has roped in Grades Energy of the US as the drilling technology partner.

Potential of block

While a realistic production potential of the block can be made only at a later date, early estimates suggest the block has 42 billion cubic metres (BCM) gas reserve.

CBM is a lean gas and contains only methane, which is a primary source of energy in natural gas. Unlike natural gas, which comes out of high reservoir pressure, CBM remains trapped in coal, subdued under water.

Energy sources

Accordingly, reservoirs are dewatered first to allow the low-pressure gas to flow out. CBM production takes some time to reach its peak.

Essar-controlled Raniganj (East) will be the second CBM-producing field in gas-starved West Bengal. Great Eastern Energy Corporation Ltd (GEECL) has already earned the distinction of producing the country’s first commercial CBM from the adjacent Raniganj block in 2007.

GEECL is currently producing close to 3 million cubic ft of gas a day (mcft) and is slated to reach 100 mcft levels in a year.

BP Exploration (Alpha) Ltd — a British Petroleum group company — is preparing to start exploration in Birbhum CBM block in Bengal.

This apart, ONGC and Reliance are developing CBM blocks in Jharkhand and Madhya Pradesh, respectively.

Production point

As a low-pressure gas, CBM can be best marketed closer to the production point.

The CBM blocks of Essar and GEECL enjoy the advantage of being located in an industrial zone (with two major steel plants of SAIL; three existing and one upcoming power plants of various utilities; a number of captive power plants; and a range of industries) with huge appetite for energy.

The area is also dotted with a number of tier-II and III towns , offering a ready market for CNG (compressed natural gas) as a cleaner auto fuel.

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