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With the government finally allowing pricing and marketing freedom, the two coal-bed methane (CBM) producers in West Bengal were hoping for the single biggest prospective customer, Matix Fertilisers and Chemicals, to start production. And, chances are Matix will be in production mode by April.
Promoted by the Kanodias of Datamatics group, the 1.3 million tonne urea plant near Panagarh — the only one in the East — was idling for nearly three years for want of gas.
To run at the full capacity, the plant needs 2.4 million standard cubic metre of gas a day (mmscmd) but the prospective supplier Essar Oil and Gas Exploration and Production Ltd (EOGPL), formerly Essar Oil, reached barely half the promised capacity at one mmscmd. While Essar could not find a customer for its gas Matix could not start operations as the feedstock availability was way below the minimum threshold.
Sources said Matix is now trying to solve the problem by adding a propane plant that will meet the internal requirement of 0.4 mmscmd equivalent CBM.
With the existing availability of approximately 0.85 mmscmd gas from Essar (Essar has already entered supply pact for the rest 0.15 mmscmd with other users) and spare capacities from the other CBM producer, Great Eastern Energy (GEECL), can help Matix to run the fertiliser plant at 55-60 per cent capacity.
Flexibility in pricing
While GEECL did not respond to queries, sources said the company has upto 0.2 mmscmd spare capacity. Productions are expected to expand with time as CBM producers try to make use of the pricing opportunity.
The government allowed CBM producers to sell gas at arm’s length price to anyone of their choice beginning April.
Accordingly, Essar has already selected aggregator GAIL, through auction, to sell its entire production for next 15 years from Ranigunj block (near Durgapur) at a crude-linked net calorific value based price, which works out at $8.08 per million British thermal unit for the current month.
EOGPL confirmed that it will enter into a pact with GAIL in this regard in the next two weeks. As per the agreement, GAIL will use the pipeline infrastructure built by Essar to supply gas to Matix and other consumers.
The CBM companies are also looking forward to the promised creation of gas grid from Phulpoor in Uttar Pradesh to Durgapur by end 2018, to enjoy freedom from lack of consumers in the region.
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