PM’s Urja Ganga pipeline prompts Essar to double gas output from Raniganj block
NEW DELHI: The Essar group is to double production of gas from Raniganj East CBM (coal bed methane) block in West Bengal, encouraged by the year-end commissioning of Prime Minister Narendra Modi’s proposed eastern energy lifeline ‘Urja Ganga’ that will connect consumers in the region.
Essar Oil and Gas Exploration and Production (EOGEPL) has currently limited production to about half a million cubic metres per day of gas as pipeline capacity is not available to transport higher volumes to consumers.
The company plans to ramp up the production to more than one million cubic metres per day once the Urja Ganga is commissioned, a senior company executive said. This would be the highest production of natural gas trapped between cola seams from any block in the country.
The company has invested Rs 4,000 crore in the Raniganj project, which encompasses drilling 348 wells, setting up the supply infrastructure, and laying pipelines to Durgapur and nearby industrial areas.
“We have already produced 1 mmscmd gas from this block, which is the highest by any player in the sector. However, sustaining production at that level is unfeasible without the GAIL pipeline being commissioned. This is why we are producing far lower quantities of gas than we are capable of,” the executive said.
The executive said EOGEPL is also planning to drill additional wells in accordance with the approved field development plan for the block.The additional wells will enable the company to ramp up production to a peak of 2.3 mmscmd in the next few years, he said.
The Urja Ganga gas pipeline links Jagdishpur in UP to Haldia in West Bengal and Bokaro in Jharkhand and Dhamra in Odisha. The pipeline is being commissioned in phases and the last leg is scheduled for completion by December 2019.
This will help gas supplies to reach four fertiliser plants in Gorakhpur, Sindri, Barauni and Panagarh, besides more than two dozen towns where city gas distribution rights have been awarded recently. The total demand in the region is envisaged at about 20 mmscmd.
According to the Directorate General of Hydrocarbons, India has the fifth-largest proven coal reserves in the world and, therefore, holds significant prospects for exploration and exploitation of CBM. Raniganj East block is India’s most prolific CBM block, holding 1 trillion cubic feet of recoverable reserves.
In August 2018, EOGEPL signed a gas sale and purchase agreement with GAIL, to formalise a 15-year gas supply contract between the two companies. The GSPA allows EOGEPL to monetise its entire CBM production at a globally competitive price.
EOGEPL is a wholly-owned subsidiary of Essar Exploration and Production Ltd Mauritius (EEPLM). EEPLM is an early stage developer, focussed primarily on oil and gas exploration.
Its global portfolio includes conventional acreages with a net resource of 1 billion barrels of oil equivalent (bboe), as well as unconventional hydrocarbon acreages that have a resource base of 15 Tcf (2.5 bboe) of gas. It has invested USD 1.1 billion in various acreages across the world.
These investments include unconventional hydrocarbon acreages in India through EOGEPL, a joint venture with Eni in Vietnam and investments in an exclusive block OPL 226 in Nigeria.
“EEPLM seeks to utilise its experience as a pioneer and leader in unconventional CBM gas development in India to explore and monetise its other acreages towards enhancing the country’s energy security. With a certified shale gas resource base, it is also poised to become a pioneer in this emerging energy frontier,” the executive said.