Reliance wants to sell CNG from Sohagpur CBM blocks

Vol 11, PW 13 (01 Nov 07) Midstream & Downstream

Mukesh Ambani-controlled Reliance Industries is set to become the second company in India after Great Eastern Energy to use Coal Bed Methane as CNG for cars, buses and auto-rickshaws.

PETROWATCH learns plans to venture into the CNG business are at a â€کvery’ early stage but that Reliance is close to issuing a global tender to hire a contractor to design and commission a â€کmother’ CNG station in the Shahdol district of Madhya Pradesh, site of its Sohagpur East and Sohagpur West CBM blocks. “Reliance has been flaring gas from the blocks for over a year,â€‌ says an industry source.

“Enough gas is coming out to run a CNG station with a capacity to handle 6000 cm/d.â€‌ Reliance also considered using its CBM for power generation or for industrial customers in and around Shahdol but finally decided on CNG, concluding that power generation and direct gas sales might take longer to materialise.

“Gas from the wells will be brought to an existing â€کcentral gathering facility’ where it will be compressed and fed into the CNG station,â€‌ we hear. Reliance has carried out an internal assessment of the potential market for CNG in and around Shahdol and identified auto rickshaws as its main potential customers for the future.

“Another idea is to sell CNG to small dumper trucks used by the mining companies in Shahdol,â€‌ we hear. “If these dumper trucks convert to CNG, Reliance can sell big volumes.

â€‌ Reliance says it will approach local authorities for permission to go ahead with its CNG plans when the business parameters are firmed up. “If all goes well,â€‌ we hear.

“Reliance’s first CNG station should be commissioned within six months.â€‌ Reliance’s CBM plans received a boost last month when the DGH approved its five-year development plan.

“DGH approval was internal only,â€‌ says an industry source. “The DGH is in the process of shifting its office to Noida.

Once they settle in their new office, they will send the letter of approval to Reliance.â€‌ Reliance hopes to begin its development plan next year, with a first batch of 250 development wells at both blocks.

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