Getting ready to supply CBM by pipeline from Raniganj

Vol 12, PW 15 (18 Dec 08) Midstream & Downstream

Factories waiting for piped gas in India’s highly industrialised eastern region can rest easy.

By the end of this month Great Eastern Energy – India’s first commercial producer of Coal Bed Methane – will turn on the tap for a steel factory at Kulti in West Bengal belonging to state steel giant SAIL (Steel Authority of India). Before the end of this month, gas will flow through a 11-km-long pipeline from Great Eastern’s Raniganj CBM field to its gas gathering station on the outskirts of Asansol and then to the steel factory at Kulti.

“Great Eastern is now laying the pipeline and is also in the final stages of price negotiations with the Kulti factory,â€‌ a source tells PETROWATCH. Pipe laying work was expected to be completed last month but was hindered by heavy rain and red tape involved in getting official permission to pass under railway lines.

“Heavy rains stopped the work as the land was flooded at many places on the route of the pipeline,â€‌ we are told. Initially, the steel factory at Kulti will buy 5000 cm/d CBM and gradually increase its purchases.

Even though the price is still being negotiated, we hear agreement is likely around the figure of Rs27/cubic metre. “This compares very favourably with the Rs57/kg that SAIL is paying for LPG,â€‌ says a source.

Great Eastern is also preparing to lay a 50-km-long, 12-inch diameter pipeline to carry CBM to Durgapur in West Bengal, where it sees a market in several large iron and steel factories that dot the region. But rocky terrain means that pipeline laying to Durgapur – expected to begin early next month – will take seven to eight months; the route also passes through towns and villages.

“Getting permission will take time so the work will be slower,â€‌ we hear. Great Eastern is in talks with potential customers in Durgapur.

“SAIL’s alloy steel plant alone has a demand of 40,000 cm/d,â€‌ we hear. “There is also the Durgapur Steel Plant and several steel rolling mills where combined demand is 40,000 cm/d.