Calcutta, Jan. 8: Oil and Natural Gas Corporation (ONGC) is in talks with Bokaro Steel Plant of Steel Authority of India Limited (SAIL) for supplying coal-bed methane (CBM) gas after it starts commercial production.
Talking to The Telegraph, A. K. Balyan, director (HR and business development), ONGC, said, 'We have already initiated talks with Bokaro Steel Plant on the benefits of using CBM as fuel and reducing agent for steel production.'
'We are also in talks with Fertiliser Corporation of India at Sindri for the use of CBM at their plant, which will economise their operations,' said Balyan.
'As we plan to start our first commercial production by March 2007 in Jharia, it makes sense to scout the neighbouring area for consumers. A market survey of probable consumers has revealed that there is a huge gas requirement both for industrial as well as domestic use,' said Balyan.
Studies show that injection of natural gas into blast furnaces can reduce coke consumption by 30 per cent and can increase iron-making capacity by 40 per cent.
CBM provides the same benefits as conventional natural gas, and could easily be substituted for, or mixed with, natural gas for blast furnace use. Injection of CBM in blast furnace of Bokaro Steel Plant will improve performance and can enhance its productivity.
Balyan also said the use of CBM is more environment-friendly and is three times less costlier than the conventional sources of energy.
'We will commence our pilot project at the Jharia block soon. There is not much time lag between the pilot project and actual commercial production,' said Balyan.
ONGC has also talked to Greater Calcutta Gas Supply Corporation Limited (GCGSCL) for laying an additional gas pipeline of 70-80 kms, which will connect Bokaro with the industrial region of Bengal, Balyan added.
Apart from GAIL, several companies have approached ONGC for laying pipeline to distribute CBM after it starts commercial production.
'Although we are evaluating various proposals, if need be, we can set up our own pipeline for distribution as ONGC was the first company to think of setting up a national gas grid,' said Balyan.
ONGC started the CBM project at Jharia about four years ago. The company has a 90 per cent stake in the block, while Coal India has the remaining 10 per cent.
The upstream major is confident of commercial success of the product because of a rising demand for industrial gas and transportation fuels.
India holds only 0.5 per cent of the world's oil and gas reserves compared with West Asia's 65 per cent oil and 36 per cent gas. Under such circumstances, alternate fuels like CBM are important, keeping in mind the vast reserves of Coal that India possesses, Balyan said.