The Rs 3,000-crore investment for full-fledged coal-bed methane production from the Ranigunj block by Essar needs more acres of land, a company official said today.

“We need around 1,000 acres to drill 500 wells, which we plan to do in the next 18 months,” Essar Oil Project Director Shashank Shekher told reporters here on the sidelines of a seminar.

The company has 180 acres and has drilled 85 wells for exploration.

“With the current land, we can drill another 70-75 wells, but for 400-500 wells for full fledged production of CBM we need more land,” Essar officials said.

The company was facing issues in direct negotiations with farmers along with pricing, company sources said.

The West Bengal government has decided not to acquire land for any project. However, resolving the 14Y clause from the Land Acquisition Act will allow the company to acquire land directly.

Ranigunj block is the first CBM block with Essar of three blocks in Orissa, Jharkhand and Chattisgarh.

Currently, Essar produced 28,000 standard cubic metre of gas per day. Its optimum estimate was one trillion cubic metre per day when optimum wells begin production.

Essar officials said the company’s debt stress was unlikely to have any impact on the development of the project.

Meanwhile, the state government has asked for CBM gas for its transport sector and power.

Gail has also requested the state government to urge Essar to offer gas for supply in Kolkata.

Gail, Hindustan Petroleum (HPCL) and Greater Calcutta Gas Supply Company today signed an MoU for a joint venture for city gas distribution, which is likely to require an investment of around Rs 2,000 crore.

The project was awaiting the Petroleum and Natural Gas Regulatory Board’s approval.

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