Gas output at Essar’s Raniganj coal block crosses 1 mmscmd

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Essar Oil today said gas output of its Raniganj coal-bed methane (CBM) block in West Bengal has crossed 1 million standard cubic meters per day, the first Indian unconventional hydrocarbon field to achieve the mark.

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Essar Oil, which has so far invested Rs 3,300 crore in the CBM block, is targeting to reach peak output of 3 mmscmd in 2017-18 fiscal year.

“Raniganj (East) Block in West Bengal has become India’s first CBM (Coal Bed Methane) asset to cross the 1 mmscmd production milestone. This makes Essar the country’s largest unconventional gas player,” the company said in a statement.

Essar had started test production from the block in 2011.

As per 2016 NSAI (Netherlands Sewell & Associates, Inc.) report, the proven, probable and possible gross CBM reserves in the Raniganj (East) Block is estimated at 1.09 trillion cubic feet. The Block has an additional resources in the ‘contingent’ category of around 270 billion cubic feet.

“We are targeting 1.8-1.9 mmscmd of production by the end of current fiscal and by mid of 2017-18 fiscal we should be producing peak output of 3 mmscmd,” the company’s CEO-E&P Manish Maheshwari said.

In the last 12 months, the average well productivity has more than doubled, he said adding the company has planned a capex of Rs 500 crore for CBM exploration and production this fiscal.

“Essar has commenced supply to Matix Fertilisers for its pre-commissioning activities at the rate of 150,000 scmd. Besides Matix, the CBM gas is being supplied to industrial consumers in the catchment area of Durgapur,” the statement said.

The price of gas is as per government notified rate is USD 3.06 per million British thermal unit at present.

“There are tremendous opportunities in the domestic unconventional hydrocarbon sector. The Hydrocarbon Exploration Licensing Policy (HELP), which was announced by the Government in March 2016, recognises this potential in contributing towards national energy security,” Maheshwari added.

An independent study puts in-place shale gas resources of around 8 Tcf underneath the CBM play in the Raniganj (East) Block, the statement said.

Besides Raniganj (East), Essar has four other CBM blocks including in in Jharkhand and two in Odisha.

Essar has approached the government for permission to further explore shale formations the CBM block.

PTI

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