Essar Energy Secures Raniganj CBM Field Environmental Clearance, India

Essar Energy, the India-focused integrated energy company, said that it has been granted phase III environmental clearance for its coal bed methane (CBM) gas field at Raniganj, West Bengal, allowing it to increase drilling to 650 wells.

This environmental clearance allows the full field development of the Raniganj block, excluding forest area, and will enable Essar Energy to increase production to the targeted level of around 3 million standard cubic metres of gas per day (scmd), up from around 60,000scmd currently.

So far, 135 wells have been drilled at Raniganj, of which 57 are in production. The drilling programme will now be accelerated.

The phase III approval was granted by the Government of India’s Ministry of Environment and Forests.

Raniganj, in which Essar Energy has a 100 per cent interest, is a 500km2 block with total proven and probable reserves (2P), independently evaluated by consultants Netherland, Sewell and Associates Inc, of 113 billion cubic feet (bcf) gross (3.2 billion cubic metres), or 18.8 million barrels of oil equivalent. There are also best estimate contingent resources (2C) of 445bcf gross, or 74.1mmboe and 297bcf gross, or 49mmboe, of current best estimate prospective resources.

Naresh Nayyar, Essar Energy chief executive, said: “The final phase III environmental approval for Raniganj is an exciting milestone and is the key to us reaching peak production. We expect to grow the coal bed methane business significantly in the coming years as we utilise the learnings from Raniganj to develop our other four blocks.”

The company is awaiting a Government decision on an appropriate commercial sales price for Raniganj, but in the meantime will continue to sell gas from the block at the approved test sales price.

Essar has already contracted gas sales from Raniganj to local industrial customers. The majority of the gas sold from the project is being sold to a new fertiliser plant being built approximately 30km from the Raniganj field. Of Essar’s 15 oil and gas blocks, five are CBM blocks in India, with a total 2,733 square kilometres of acreage and more than 10 trillion cubic feet (tcf) of reserves and resources.

This includes the large Rajmahal gas field in Jharkand province, which has around 4.7tcf of best estimate prospective resources, located 150km from Raniganj. Overall, these assets make Essar the leading CBM player in India.

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LNG World News Staff, March 04, 2013; Image: Essar Energy