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Essar to Invest Rs. 2,000 Cr. in Brownfield Coal Bed Methane Project in Bengal

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Essar Oil & Gas Exploration & Production Ltd. (EOGEPL) will be investing about Rs. 2,000 crore towards a brownfield expansion in West Bengal’s Raniganj for its Coal Bed Methane (CBM) project.

Essar to Upgrade Existing CBM Wells at Raniganj, Drill 200 New Wells

Upgradation to Enhance Coal Based Methane Production by 0.4 mmscd

EOGEPL plans to upgrade its existing 350 wells at Raniganj block, which currently have a collective capacity of extracting 0.9 Million Metric Standard Cubic Metres per Day (mmscd) of Coal Bed Methane.

Speaking about increasing output from the existing wells, Mr. Pankaj Kalra, CEO of EOGEPL said “We are employing the latest technology in the existing wells to ramp up production from 0.9 mmscd to 1.3 mmscd which will be completed in a few months”.

Output to Reach 3 mmscd After Commissioning 200 New Wells

In addition to upgrading its existing wells, EOGEPL will be drilling 200 new wells at Raniganj in the next 18 to 24 months.

Mr. Kalra elaborated that once these new wells are commissioned, the company’s CBM production from the block is expected to touch the 3 mmscd mark. He added that currently, EOGEPL has a 65% share in India’s CBM production, which is poised to grow to 90% once the new wells are operationalised.

Brief Background of Essar’s Raniganj CBM Block

Essar Oil & Gas Exploration & Production Ltd. was awarded the Raniganj CBM block in July 2002. This block is located in West Bengal’s Burdawan district, and sprawls over an area of 500 sq. Km. Raniganj block is one of the major CBM blocks in the country and has about 1.1 trillion cubic feet (TCF) of exploitable reserves.

Essar has already invested about Rs. 5,500 crore at Raniganj so far.

Potential of Coal Bed Methane in India

Even though Coal Bed Methane is chemically similar to natural gas, it provides a cleaner alternative to the latter. This is because the cost of exploration of CBM is lower than that in case of natural gas.

India’s Massive Potential Reserves of CBM

As per the Directorate General of Hydrocarbons (DGH), Ministry of Petroleum & Natural Gas (MoPNG), India has potential reserves of about 92 TCF of Coal Bed Methane spread across 12 states. DGH has recognised various CBM blocks across the country and has so far awarded 33 blocks through bidding. These blocks have potential reserves of 62.4 TCF collectively.

CBM’s Potential to Reduce Natural Gas Imports

In FY-23, India’s import dependence for natural gas stood at 46.3%. While this was a decrease from 48.2% during FY-21, the International Energy Agency (IEA) stated in October 2022 that India’s natural gas imports are projected to double by 2030 on account of growing domestic demand. Exploiting the country’s CBM reserves can therefore help mitigate India’s dependence on foreign natural gas.

About Essar Oil & Gas Exploration & Production Ltd.: Essar Oil & Gas Exploration & Production Ltd. is a subsidiary of Essar Exploration & Production Ltd., and focuses on the exploration of unconventional hydrocarbons such as Coal Bed Methane and Shale gas. The company reported a revenue of Rs. 219 crore for the third quarter of FY-23.