Essar's Raniganj Block crosses 1 mn SCMD production milestone

Essar announced its CBM production from its flagship project in Raniganj (East) to cross one million standard cubic metre per day (scmd).

Essar has become the first company in India to achieve the one million milestone.

CBM production assumes an added significance to the State of West Bengal as hydrocarbon discovery on a commercial scale in the conventional reservoirs like sandstone or limestone is yet to materialize.

With Raniganj (East) Block on stream, the quest for unconventional energy resources has begun in good earnest in West Bengal.

The Raniganj (East) Block has sizeable CBM reserves with 25-30 years of field life. The 2016 reserve report from Netherland Sewell and Associates, Inc. (NSAI), US, have certified the proven, probable and possible gross CBM Reserves in the Raniganj (East) Block at 1.09 TCF. The Block is assessed to have additional resources in the 'contingent' category of around 270 BCF.

"CBM offers a new energy frontier as India evolves to a gas based economy. Delivering one million scmd from Raniganj Block marks the beginning as the potential is tremendous and the Company has definitive plans to ramp up CBM production from 350 wells to two million scmd by March 2017 wells and reach a plateau of three million scmd by mid 2017-18," said CEO-E and P Essar, Manish Maheshwari.

Essar has commenced supply of CBM, presently at around 200,000 scmd, for pre-commissioning activities to Matix Fertilisers, one of the world's largest single stream urea plant and the first designed for CBM as the feedstock.

With installed capacity of 1.3 million tonne per annum urea at an investment of Rs. 6000 crore, Matix Fertilizers shall commence urea production using CBM from Raniganj in Q3 FY2016-17.

Besides Raniganj, Essar has high quality acreages of around 2700 sq.kms. for CBM exploration and production in India spread across the States of Odisha, Jharkhand, Madhya Pradesh and

Chhattisgarh. Aggregated across these assets, the gas-initial-in-place have been estimated to be in excess of 6 TCF.

A study undertaken with the support of US Trade & Development Agency (USTDA), by an independent US firm with expertise in shale, have made a preliminary assessment of original in-place shale gas resources of around 8 TCF underneath the CBM play in Raniganj (East) Block.

"Our Company's experience, expertise and enterprise shall help tap the untapped hydrocarbons seated in unconventional reservoirs - be it cbm, shale or tight reservoirs, and produce them in a safe, responsible manner and contribute towards India's energy security," added Manish Maheshwari.

Government, vide a notification in October 2014, has defined a mechanism to establish wellhead price for gas in India. The wellhead CBM price from Raniganj (East) is as per the price notified by the Government.

On the E and P outlook for India, Manish Maheshwari added, "The Hydrocarbon Exploration Licensing Policy (HELP), announced by the Government in March 2016, is apposite and progressive - a big help - to boost domestic production. Of the many dimensions of HELP, the Uniform Licensing Policy allows an operator to explore for and produce all types of hydrocarbons from anacreage."

"Discovered Small Fields (DSF) being offered by the Government, bidding for which closes end of October 2016, present a unique opportunity to the industry players to hunt for exploration upside whilst monetizing the existing discoveries," he added.