Essar vows support to Bengal facility
Essar Oil will invest Rs 1,000 crore over the next 12 months to reach a peak production of 3 million standard cubic metres per day (mscmd) of coal bed methane by May next year from Ranigunj in Bengal.
- Published 7.04.15
Calcutta, April 6: Essar Oil will invest Rs 1,000 crore over the next 12 months to reach a peak production of 3 million standard cubic metres per day (mscmd) of coal bed methane by May next year from Ranigunj in Bengal.
The company today announced it reached half-a-million-tonne gas production and laid down the road map to ramp up output six-fold in a little more than a year.
"We have the environmental and forest clearances, and most importantly, land for drilling wells. The company is on course to drill 370 wells in the next one year," Manish Maheshwari, CEO (exploration & production) of Essar Oil, said.
Essar Oil now operates 100 wells in Ranigunj and is putting the final touches to bring another 155 into production by September. Once completed, the company would be producing 1.2 mscmd gas from the region.
CBM, a source of clean energy, replaces liquid fuel such as diesel or furnace oil. Essar supplies to a host of industries in the Durgapur-Asansol region such as Durgapur Steel Plant, Alloy Steel Plant and Philips Carbon Black.
The cost of gas for customers is $6-6.5 per million British thermal unit, depending on the distance from the well. The price is determined by the government, which allows the company to keep a transportation cost and marketing margin.
Essar will drill another 100 wells for which it has acquired the land. The company needs to secure land for another 20 wells. Essar owns land for wells, gas gathering stations, compressors and boosters, while taking it on lease for a pipeline. After facing backlash over acquisition on some occasions, Essar reworked its strategy to use 40 per cent less land for drilling by taking up a cluster approach.
The company plans to sell half of its peak production to anchor customer Matix Fertilisers which will produce ammonia and urea.