Essar hopeful of tripling gas output from CBM block within 24 months

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Essar Oil and Gas Exploration and Production (EOGEPL), which has nearly doubled its gas production to 0.8 million metric standard cubic meters per day (mmscmd) over the last one year, is hopeful of touching 1.0 mmscmd by August-September this year. EOGEPL produces coal bed methane (CBM) from Raniganj East Block in West Bengal.

The company had invested close to ₹5,500 crore on the project. EOGEPL, which has drilled 350 wells in the Block, is looking to drill 200 more wells at an estimated investment of around ₹1,500-2,000 crore over the next 18-20 months. This would help triple its production to close to 3 mmscmd over the next 18-24 months.

Production had been curtailed

According to Pankaj Kalra CEO and Director EOGEPL, the only roadblock to scaling up production was the Urja Ganga Pipeline and the commissioning of the same by Prime Minister Narendra Modi in 2021, has cleared the hurdle. The company’s production had to be curtailed to 450,000 mmscmd but with the commissioning of the pipeline in May 2021, it has been ramping up output.

“The unavoidable delay in the GAIL Urja Ganga trunk line caused numerous challenges for us. However, steady efforts and technological applications to ramp-up gas production to double the production and cross 0.8 mmscmd has brought us back on track. Our next milestone remains 1.0 mmscmd and we are putting concerted effort to reach it at the earliest,’’ Kalra told BusinessLine.

As of now, EOGEPL operates around 350 wells in the block and since May, 2021 with a systematic approach of well revival, technology application and close monitoring, the company has been consistent with the ramp-up forecast from renowned CBM experts.

Drilling additional 200 wells

“We are looking to touch production of 1.0 mmscmd by August-September by by re-fracturing and revival of our existing wells; acidising and through radial drilling. We are also hopeful of tripling gas production to nearly 3 mmscmd in the next 18-24 months by drilling an additional 200 wells. We are actively working with both central and state government,” he said.

The CBM gas produced by the company is sold to state-owned GAIL at the formula linked to international Brent crude oil prices.

The importance of domestic gas in the energy basket for any developing country like India is extremely crucial considering the uptrend in gas demand, price and rising import bills. EOGEPL is strategically focused on the development of unconventional hydrocarbons in the country.

Huge shale gas reserves

Besides CBM, the block has an estimated 8 trillion cubic feet of in-place shale gas reserves which the company plans to tap moving forward. It plans to drill two test wells over the next four-to-six months and see the results and by March 2023 it plans to scale up the project based on the success of the test wells.

According to Kalra, globally 20 per cent of in-place shale gas reserves are recoverable (can be brought to production), which gives 1.6-2 tcf of such reserves in the block.

Originally posted: The Hindu