Why Essar is leading the charge in Unconventional Hydrocarbons - Essar | Creating Value

Why Essar is leading the charge in Unconventional Hydrocarbons

Jan 10th, 2019

Unconventional Hydrocarbon reserves are of immense significance to Eastern India, which is starved of conventional oil & gas reserves. Essar is among the very few companies that are leading the charge in the exploration & production of these Unconventional Hydrocarbons, with its extensive CBM acreage, which is India’s largest, in the region. What’s more its Raniganj East CBM block in Durgapur, West Bengal, which is already India’s highest producing coal bed methane block, also has certified reserves of Shale Gas. Backed by the recently introduced Simultaneous Exploration Policy, EOGEPL is all set to begin shale exploration in the block and put India on the Shale map.

Mr Amit Mitra recently spoke about West Bengal’s shale potential and acknowledged Essar’s interest in playing a key role in this development.

A Times of India article in November last year reported that EOGEPL’s Raniganj East CBM block in West Bengal, which is the highest producing coal bed methane block in the country today, also has tremendous shale potential as has been confirmed by an independent study. The block has shale gas resources of 7.7 TCF (trillion cubic feet) and recoverable reserves of 1.6 TCF. Supported

Over the next two years, EOGEPL will be drilling a few exploratory and horizontal shale test wells at an expected budget of $30 million. If these test wells are successful, the total investment, including post development and production, in shale gas exploration will be to the tune of $1 billion or Rs 7,000 crore.

GAIL’s Urja Ganga Pipeline

The other major development in the region is the imminent commissioning of the Pradhan Mantri Urja Ganga Pipeline, as reported in DNA today.

Speaking to the newspaper, Mr Vilas Tawde, MD & CEO of EOGEPL, said:  “Last year, CBM development received a huge leverage with the gas marketing freedom, which has given CBM players LNG import parity price for commercial development of CBM. The other crucial factor is the commissioning of the Urja Ganga pipeline, which we are confident GAIL would implement before July. We  are now synchronising our production ramp-up plan from our Raniganj East block to meet our GSPA commitments to GAIL.”

EOGEPL has commenced supplies of CBM gas from the Raniganj East block to GAIL in accordance with a 15-year supply contract that it recently signed with the PSU for offtake of its entire production from the block. Saleable gas volume of up to one mmscmd would be achieved by March 2019. With further ramp-up, 1.7 mmscmd and 2 mmscmd of production are targeted by March 2020 and March 2021, respectively. According to him, the CBM development plan for the Raniganj East block envisages drilling of 500 wells, of which 348 have already been drilled at an investment of Rs 4,000 crore, which includes an equity of Rs 2,700 crore.