No one wants to sell CBM to desperate SAIL

Vol 16, PW 9 (15 Nov 12) Midstream & Downstream

SAIL must feel like the lone wallflower at the CBM party - no one wants to supply it with CBM for a planned expansion of its Durgapur steel facility in West Bengal.

State-owned SAIL invited EoIs on October 11 for 175,000 cm/d for its factory near Great Eastern Energy’s 210-sq km Raniganj CBM block and Essar’s 500-sq km Raniganj East CBM block. But SAIL received no response by the November 5 deadline, forcing it to delay plans to expand capacity from 2.1m t/y to 2.8m t/y.

“We wanted to complete the Durgapur expansion by mid-2013,” confirms disappointed SAIL. “But we’ve received no offers for CBM so must postpone the expansion till end-2013.

” SAIL, he adds, wants 175,000 cm/d by June but anticipates demand might rise to 300,000 cm/d. “Essar doesn’t want to supply gas to us,” adds SAIL.

“It wants to sell its gas to the Matix fertiliser factory at Panagarh.” Essar chief Ravi Ruia’s daughter Smiti Ruia is married to Nishikant Kanodia, whose family owns the 3m t/y Matix factory.

SAIL’s ties to Essar are nowhere as close. “Great Eastern has contracted all the CBM it is producing,” we hear.

“That’s why it didn’t respond.” Essar is producing 30,000 cm/d from over 20 wells at Raniganj East and has 100 wells ready to start producing once ministry approval is in hand to sell CBM at $4.20/mmbtu.

Great Eastern is producing up to 350,000 cm/d from over 120 wells at Raniganj, which it sells as CNG. As fuel SAIL currently converts coal to coke and then to coke oven gas to use in its furnace and steel rolling area.