Essar's Raniganj coal bed methane asset crosses 0.5 mn scmd production

Essar is the leading coal bed methane producer in India

Essar Oil’s coal bed methane (CBM) output from its flagship Raniganj block in West Bengal has crossed 0.5 million standard cubic metres a day (mscmd).

This makes it India's largest CBM gas producer.

So far, Great Eastern Energy Corp was the largest, producing about 0.3 mscmd, officials said.

"While nearly 100 wells have been already placed on production, an additional 155 have been drilled and are at various stages for a further production ramp-up," India's second-biggest private refiner said.

"We have been able to register a manifold increase in CBM production to 0.55 mscmd and expect to ramp up delivery to 1.2 mscmd over the next few months," said Manish Maheshwari, chief executive, exploration and production.

Currently, Essar Oil is selling gas from the block at an average price (including transport cost and margin) of $6.5 million British thermal units (mBtu) to 12 entities, including the Durgapur steel plant. With the increase in production, it would start supplying to Matix Fertiliser and Chemicals, which Maheshwari said would the anchor consumer. Matix has the world's largest single-stream factory for ammonia and urea, in West Bengal.

Essar holds five CBM blocks, with an area of 2,700 sq km and prospective resources of about 10 trillion cubic ft. Apart from Ranigunj, its other four blocks are Rajmahal in Jharkhand, Talcher and Ib Valley in Odisha, and Sohagpur (NE) in Madhya Pradesh.

“There has been significant progress in Rajmahal as well, as we have got exploration license and environments clearances,” Maheshwari said. The company is targeting production from this block in the next couple of years.