ONGC Hits a Bump in CBM Efforts
Oil & Natural Gas Corp's plan to extract coal bed methane has hit a bump.
The state owned explore announced that five of its nine blocks are not commercially viable.
"The company has already relinquished four blocks and one more will be given up shortly," an oil ministry official said requesting anonymity.
ONGC had secured seven CBM blocks under the government's first two rounds of bidding, and was given another two on nomination basis.
"Assessment and relinquishment of five blocks have already been completed, and the four blocks, from where commercial production is expected are on the verge of entering into development phase," said an ONGC spokesperson.
The blocks that are expected to go into production are located at Jharia, Bokaro and north Karanpura in Jharkhand, and Raniganj in West Bengal.
ONGC can start commercial production only after the Directorate General of Hydrocarbon, the upstream regulator, approves its development plans. While the explorer has already submitted the plans for the Bokaro block, those for Jharia will be done by August 2011 and that for north Karanpura is expected by July this year.
The company has started selling some incidentally produced gas from its Jharia block. A company official said 1.17 million standard cubic meters per day (mmscmd) of gas has already been sold since January 2010.
The delay in production from the Jharia block was because of overlapping captive coal mining and land acquisition problems in the state.
According to the regulator's website, the Bokaro block has about 1.2 trillion cubic feet (tcf) of gas reserve.
Great Eastern Energy Corp. is producing 0.16 mmscmd of gas commercially from its Raniganj block, adjacent to ONGC's ongoing project.
Essar expects its Raniganj block to start commercial production soon. "The block, which has a potential to produce 3.5 mmscmd gas, has already started supplying fuel in small quantities to local buyers," an Essar official said.
Reliance Industries too is set to commercialise production from its two blocks at Suhagpur, in Madhya Pradesh, in 2012-13.
The government awarded 30 Coal bed methane blocks under four bidding rounds and three blocks on nomination basis.
India has the third largest proven coal reserves and it is the fourth largest coal producer in the world. The prognosticated CBM resources are about 50 tcf, of which only 8.39 tcf has been established, according to the regulator's website.
Source: Economic Times