Calcutta, Nov. 12: The Oil and Natural Gas Corporation is planning to start commercial production of coal-bed methane (CBM) in the first quarter of the next financial year in Jharia.
Chairman Subir Raha said the company, which has pioneered CBM in the country, has successfully completed the first production testing in Jharia. The next phase is commercial production.
The country’s largest profit-making company has high hopes in its CBM projects in terms of the return on investment it expects to flow from them. CBM is a low-pressure gas and a clean fuel for electricity generation.
“The rich gas can be synthesised into liquids suitable for use as feedstock (for industrial use) and transportation fuel,” Raha said.
The company has four major CBM blocks in Jharkhand and Bengal, the commercial basis of which is the soaring demand for industrial gas and transportation fuel.
“India holds only 0.5 per cent of the world’s oil and gas reserves against West Asia’s 65 per cent of world’s oil and 36 per cent of gas. In the circumstances, it is important to find and produce alternative fuels like CBM,” Raha said.
About four years ago, work started on the Jharia CBM project where the company has a 90 per cent stake and Coal India the remaining 10 per cent.
Four wells have been dug in the area and the test results are encouraging. “But for successful commercial production, we need to dig at least 100 wells in the first phase. The total investment will be around Rs 100 crore,” a company source said.
They pointed out that the level of investment did not make the company flinch, but the “only thing we have to be sure of is the marketing aspect of the project”.
When commercial production starts, the Jharia project has the potential to help in an industrial turnaround in Jharkhand and Bengal as gas becomes available locally.
The project may not generate heavy employment in the area directly. But, the sources said, the success of the project could transform the condition of industry in the region, producing large employment spin-offs.