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It was ONGC that pioneered the (pilot) coal-bed methane (CBM) production in the country, more than a decade ago. It was also the first company to have drawn up a mega (Rs 1,000 crore) commercial production plan as early as in 2004.
In a strange turn of history, the same company today may end up depriving the gas-starved Eastern region including West Bengal, an opportunity to fuel CBM-led growth.
In a recent submission, ONGC literally spiked the Petroleum and Natural Gas Regulatory Board's (PNGRB) plan to create country's first CBM grid – the much needed gas delivery infrastructure – connecting the CBM assets in Bengal and Jharkhand with the consumption centres in and around Kolkata. The development came in the middle of a bidding round for the project, originally slated to be closed in August this year.
Contrary to tall reserve and production projections made previously, “ONGC has claimed that the region does not have enough gas to make the pipeline a viable proposition,” the PNGRB Chairman, Mr L. Mansingh, told Business Line .
Referred as Asansol-Howrah trunk pipeline, the 270-km grid was scheduled to feed industries as far as in the port town of Haldia – approximately 100 km from Kolkata.
“Based on ONGC's objections, we have postponed the bidding period up to February 10, 2012,” Mr Mansingh said. The regulator has reportedly also sought the views of the upstream regulator Directorate-General of Hydrocarbons (DGH) on the CBM potential of the region.
The public sector E&P major controls as many as six CBM assets in the region and is producing limited quantities from two wells at Parbatpur in Jharia drilled as early as in late 1990's and early 2000.
Contrary to ONGC's dismal performance, Essar Oil and Great Eastern Energy Corporation – controlling one block each in the region – have already brought their assets into production mode. Though official confirmation is not available, it is learnt that the limited production of GEECL and Essar fetches as much as $8 per million British thermal unit (mbtu), for term contracts.
Based on an expression of interest submitted by Essar Oil, PNGRB invited bids for the pipeline in March this year.
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