First CBM commercial sale in India set for July 14th

Vol 11, PW 5 (12 Jul 07) Midstream & Downstream

Kolkata-based Great Eastern Energy is preparing for first commercial sales of Coal Bed Methane from its Raniganj field in West Bengal, marking the first time in India that CBM will be sold in the market.

Great Eastern says initial production that will be sold from July 14th (Saturday) at Asansol town will be only 40,000cm/d but that this will slowly be ramped up. Finding customers, says a company source, will not be a problem, as demand of up to 5m cm/d exists within a 50-km radius of the Raniganj field.

“Steel, sponge iron, chemical, glass and ceramics industries all want CBM,â€‌ says a source. “In addition there is demand as CNG.

â€‌ Great Eastern believes first customers of CBM from Raniganj will be mainly CNG users. In addition, Great Eastern plans to sell CBM to small factories in and around Raniganj, a small town of 120,000 inhabitants in the Bardhaman district of West Bengal.

“Once production picks up we will target big industrial units like Durgapur Steel Plant, Indian Iron and Steel,â€‌ adds a source. “Big factories will take time to modernise and convert to gas.

â€‌ Great Eastern is installing two compressors along the pipeline from its Group Gathering Station at Raniganj to the city gas station. “Gas in the pipeline will move at a pressure of between 60-psi and 215-psi,â€‌ we are told.

“Most of this gas will be initially sold as CNG.â€‌ Adds Great Eastern: “We will make clusters of wells, compress the CBM to sell it as CNG.

â€‌ To attract customers, Great Eastern wants to sell CBM at a price lower than diesel as well as other fuels like naphtha and fuel oil. Great Eastern is unwilling to discuss the sale price, but notes that Reliance’s D-6 gas has secured a landfall price of $4.33/mmbtu on the east coast.

Great Eastern plans to start the second phase of its four-year, 100-well drilling programme at Raniganj when the RD-20 rig bought in May becomes available by the end of this month. Eventually, Great Eastern will drill between 250 and 300 wells at Raniganj.