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Manish Maheswari, CEO of Essar Oil’s E&P wing, claims the company will produce 1 million standard cubic metre of coal-bed-methane (CBM) a day, at its Ranigunj field from June. This is essential for Matix Fertilisers and Chemicals urea facility to start commercial production.
Essar is currently producing up to 0.85 mmscmd gas – the highest in Indian CBM industry so far. According to the 2014 order, CBM is priced at par with natural gas and is currently quoted at $3.43 a million British thermal unit (mBtu).
Promoted by the Kanodias of Datamatics Group, the ₹5,000-crore urea plant has been waiting for Essar to supply requisite gas for nearly three years. Located in Panagarh, nearly 150 km from Kolkata, Eastern India’s only fertiliser facility is on trial run since end-2015.
Not enough The available gas, however, will not be enough to reach full capacity utilisation of 1.3 million tonnes. According to available estimates, Matix requires nearly 2.8 mmscmd to reach full production mode.
Unconfirmed sources say Matix created provision for using smaller quantities of naphtha to mitigate short supply of gas, if any. Meanwhile, Essar’s E&P activities are focussed at Ranigunj asset. “I am confident we will meet the June deadline to reach 1 mmscmd production mark,” Maheswari told BusinessLine, when reminded about the company’s failures to step up production in the past.
‘India not experienced’ According to him, India’s lack of experience with CBM production has been a major hurdle to ramp up productions in the past. Unlike conventional oil and gas fields, there are practically two commercial CBM producers (Essar and GEECL) in the country. Lack of industry data, he says, came in the way to adopt right strategies for reservoir management or plan wells.
The situation reversed as the company gained hands-on experience. Today, nearly half of the 3,000 wells are in high production (up to 20,000 standard cubic metre a day) category.
Innovative engineering also saw the company requiring less land than initial estimates, reducing the scope of social conflict.
From setting up one production well on a five-acre land in the beginning, Essar moved on to set up 7-13 wells from every two-acre pad. That 300 wells are drilled from only 70 pads, tells the story.
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