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GEECL starts commercial drilling of coal bed methane
M.C. Vaijayanthi
The Kolkata-based Great Eastern Energy Corporation Ltd became the first company in India to start commercial drilling of coal bed methane (CBM) wells when it commenced operations on January 14. The company has started drilling on the first lot of 20 wells out of 100 CBM wells at the Raniganj coalfields.
The corporation has entered into a production sharing contract for CBM over an area of 210 sq. km. at the coalfields (Damodar Valley, West Bengal) with the ministry of petroleum & natural gas (originally with Coal India Ltd). After a detailed evaluation report, undertaken by Schlumberger, the total CBM reserves at Raniganj are estimated to be approximately 1.385 trillion cubic feet.
GEECL has outsourced commercial drilling and other operations of its commercial CBM wells to three companies, namely Mitchell Drilling International (Australia), HLS Asia Ltd, a collaboration company of Halliburton, and BJ Services Company Middle East Ltd, a subsidiary of BJ Services, all of whom have vast experience in CBM projects and technology.
The 100 wells programme envisages an investment outlay of approximately Rs 575 crore for which the company raised $ 20 million through a GDR issue listed in the Alternative Investment Market on the London Stock Exchange in December last year. GEECL became the first company from West Bengal to list on the AIM at the stock exchange.
Speaking on the occasion of the listing, Prashant Modi, Joint Managing Director, GEECL said, "We are currently into assessment and market development phase of this project and the potential exceeds international norms. We have successfully drilled three pilot production wells at Surajnagar area and have also entered into a tie-up with a compressed natural gas supplier to purchase CBM gas from these three wells at pre-determined prices."
GEECL hasn't given any official confirmation on its marketing and distribution plans, but has only said that it has identified potential local consumers to whom the gas could be supplied, which includes two steel plants and four power stations which could be accessed by relatively short pipelines. The first gas supply from CBM wells is expected to hit the market by January next year and the estimated cost of the gas is between $ 5 and $ 7 per mmbtu.
[23 January 2006]
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