Oil and Natural Gas Corp and its partners will invest Rs 823 crore to produce natural gas from coal seams of its Bokaro block in Jharkhand from 2017-18, the state-owned firm's Chairman Dinesh K Sarraf has said.
ONGC is the operator of the Bokaro coal-bed methane (CBM) Block BK-CBM-2001/1 with 80 per cent stake while the remaining 20 per cent is with Indian Oil Corp (IOC).
"Investment decisions have been taken by ONGC Board for development of Bokaro CBM Block (BK-CBM-2001/1) at a total project cost of Rs 823 crore," Sarraf said in the company's latest Annual Report for 2015-16.
CBM is a form of natural gas extracted from underground coal beds, and ONGC's share in this project would be Rs 658.62 crore.
"The project envisages coal bed methane gas production of 4.068 billion cubic meters in 20 years with a peak of 0.9 million standard cubic meters per day and a plateau production of 0.75 mmscmd," Sarraf said, adding that the "production from this project is expected to commence during 2017-18".
It includes drilling of 141 wells with multilayer hydro- fracturing and installation of three production facilities.
ONGC had won the Bokaro block in the first round of CBM block bidding in 2003. The company has so far been awarded nine CBM blocks, of which it has relinqished five.
It produces 0.007 mmscmd of gas from its Jharia CBM block in Jharkhand and output is projected to touch 0.05 mmscmd by 2017-18. ONGC holds 85 per cent interest in the Jharia block while Coal India Ltd has the remaining 26 per cent. Besides, ONGC also operates North Karanpura block and Raniganj North CBM block in West Bengal.
The Jharia block is estimated to hold 85 billion cubic metres of gas reserves, North Karanpura 62 billion cubic metres, Bokaro 45 billion cubic metres and Raniganj North 43 billion cubic metres.
Officials said the Raniganj North in West Bengal may have to be relinquished as it may fall in way of a planned air- strip.
"No development phase activity could commence in the block due to non-grant of Petroleum Mining Lease (PML) from West Bengal government due to overlap with BAPL airport project," an official said. The remaining three blocks can produce a peak of 3.2 mmscmd of gas.
ONGC will drill over 350 wells in three blocks in Jharia, Bokaro and North Karanpur in Jharkhand, he said, adding that the peak output of 3.2 mmscmd is likely in 2020-21.