Essar to invest Rs 900 crore to drill 150 wells in CBM block
New Delhi: Ruia family-owned Essar Oil and Gas will invest Rs 900 crore in drilling 150 more wells on its Raniganj CBM block in West Bengal to more than double gas output to 2.3 million standard cubic metres per day by 2021, its Managing Director and CEO Vilas Tawde said. Essar Oil and Gas Exploration and Production Ltd (EOGEPL) has so far drilled 348 wells on the blocks and is producing 1 mmscmd of gas from coal seams.
"We have already invested about Rs 4,000 crore in the Raniganj East coal-bed methane (CBM) block in drilling wells, setting up supply infrastructure, and laying customer pipelines to Durgapur and nearby industrial areas. Another Rs 900 crore would be invested in drilling the additional 150 wells over the next two years," he said.
The company is selling entire production of coal-seam gas or CBM from the block to state-owned GAIL India Ltd. "The April price is $8.164 per million British thermal unit on net calorific value (NCV) basis," he said.
GAIL in February outbid Matix Fertilizers and Chemicals Ltd, Graphite India Ltd and Positron Energy Pvt Ltd to buy entire output from Raniganj.
CBM is a natural gas stored or absorbed in coal seams and contains 90-95 per cent methane. According to the Directorate General of Hydrocarbons, India has the fifth largest proven coal reserves in the world and, therefore, holds significant prospects for exploration and exploitation of CBM.