Essar’s Raniganj CBM project attains 1 million tonne daily production

Essar on Wednesday announced the start of commercial scale production of coal-bed methane gas at its flagship project at Raniganj (East) with daily production of 1 million standard cubic metres per day (scmd).

Essar has become the first company in India to achieve the 1 million milestone, the company stated in a statement.

Essar hopes to emerge the country's largest E&P player in the unconventional space with targeted production of 2 million scm per day by FY16-17 and 3 million scm per day by mid FY2017-18 from Raniganj (East) Block.

Cumulative investments of Rs3,300 crore in Raniganj (East) block till date.

CBM production assumes an added significance to hydrocarbon discovery on a commercial scale in the West Bengal as the conventional reservoirs like sandstone or limestone is yet to materialise. With Raniganj (East) block on stream, the quest for unconventional energy resources has begun in good earnest in West Bengal, Essat stated in a release.

The Raniganj (East) block has sizeable CBM reserves with 25-30 years of field life. The 2016 reserve report from Netherland Sewell & Associates, Inc (NSAI), US, has certified the proven, probable and possible gross CBM reserves in the Raniganj (East) block at 1.09 trillion cubic feet (TCF). The block is assessed to have additional resources in the 'contingent' category of around 270 billion cubic feet (BCF).

''CBM offers a new energy frontier as India evolves to a gas-based economy. Delivering 1 million scmd from Raniganj block marks the beginning as the potential is tremendous and the company has definitive plans to ramp up CBM production from 350 wells to 2 million scmd by March 2017 wells and reach a plateau of 3 million scmd by mid 2017-18,'' said Manish Maheshwari, CEO-E&P, Essar.

Essar has commenced supply of CBM, currently at around 200,000 scmd, for pre-commissioning activities to Matix Fertilisers, one of the world's largest single stream urea plant and the first designed for CBM as the feedstock. With installed capacity of 1.3 million tonnes per annum urea at an investment of Rs6,000 crore, Matix Fertilisers will commence urea production using CBM from Raniganj in Q3 FY2016-17.

With a cumulative investment of Rs3,300 crore till date, the company has drilled and fracked nearly 300 wells and established best-in-class infrastructure to produce, condition, compress and deliver CBM gas to the industrial consumers in the catchment area of Durgapur, according to Essar.

Besides Raniganj, Essar has high quality acreages of around 2,700 sq km for CBM exploration and production in India spread across the states of Odisha, Jharkhand, Madhya Pradesh and Chhattisgarh. These assets are estimated to have aggregate initial-in-place gas reserves estimated to be in excess of 6 TCF.

A study undertaken with the support of US Trade & Development Agency (USTDA), by an independent US firm with expertise in shale, has made a preliminary assessment of original in-place shale gas resources of around 8 TCF underneath the CBM play in Raniganj (East) Block.

''Our Company's experience, expertise and enterprise shall help tap the untapped hydrocarbons seated in unconventional reservoirs - be it cbm, shale or tight reservoirs, and produce them in a safe, responsible manner and contribute towards India's energy security,'' said Manish Maheshwari.

The centre has defined a mechanism to establish wellhead price for gas in India, via a notification in October 2014. The wellhead CBM price from Raniganj (East) is as per the price notified by the government.

On the E&P outlook for India, Manish Maheshwari said the Hydrocarbon Exploration Licensing Policy (HELP) announced by the government in March 2016, will help boost domestic production.

''The Uniform Licensing Policy allows an operator to explore for and produce all types of hydrocarbons from an acreage. Discovered Small Fields (DSF) being offered by the government, bidding for which closes end of October 2016, present a unique opportunity to the industry players to hunt for exploration upside whilst monetising the existing discoveries,'' he added.