Delay in Great Eastern plans for first CBM sales

Vol 10, PW 26 (03 May 07) People & Policy

Not only ONGC, but also private sector Great Eastern Energy is facing a delay in its plans to begin first commercial production of Coal Bed Methane.

Great Eastern will be the first producer of commercial CBM in India but unlike ONGC its plans are delayed by only two months. Great Eastern originally planned to begin commercial CBM sales from its Raniganj South block this month (May) but this is likely to happen only in July.

Blame the delay on the later than expected arrival of compressors. Great Eastern has already identified large volume customers such as state-owned Indian Iron and Steel Co for piped gas supplies and also several smaller factories.

“Demand from Indian Iron and Steel is itself a lot,â€‌ says a source, “Smaller factories are also very keen to have cheaper and cleaner gas.â€‌ To start with, Great Eastern plans to produce between 3000 and 5000 cm/d CBM from each of its 23 wells and, over time, ramp up output to about 10,000 cm/d per well.

Most of the supplies will be to factories and commercial establishments in and around Asansol, the second largest city in West Bengal after Kolkata. But first commercial sales of CBM will not be to piped gas customers but as CNG for cars and buses.

Clearly, this is a cheaper way of getting gas to market and, will also bring in daily cash flow. To begin with, Great Eastern will not set up its own dedicated CNG stations but will share space in an Indian Oil fuel station.

“Great Eastern will own the CNG vending machines and will pay rent to IOC,â€‌ we are told. “Work is also on to lay pipelines to supply PNG to industrial consumers.

On location at Raniganj South, Great Eastern is flaring around 500 cm/d CBM that is being produced now. Work has also started on the next phase of drilling at Raniganj South, where Great Eastern has already drilled 23 wells but wants to drill 80 more.

Plans are to use the company’s Chinese-built rig. “Between 20 and 30 wells will be drilled in the forthcoming phase of drilling,â€‌ says a source.