New Delhi: Great Eastern Energy Corp. Ltd (GEECL), India’s first producer of natural gas from coal seams, will invest up to Rs2,500 crore over the next three to four years to raise output, its CEO Prashant Modi said.

The planned capex of Rs2,000-2,500 crore will be for “drilling 144 new wells and laying internal pipelines" in GEECL’s Raniganj block in West Bengal, he said here. GEECL, the first to start coal-bed methane (CBM) production in India in 2007, produces 0.57 million standard cubic metres of gas a day at the Raniganj block.

“Eventually, it will rise to 2.5-3 mmscmd," he said without giving timelines. The company has so far drilled 156 wells on the block which has gas reserves of 2.6 trillion cubic feet in place, he said. The government has so far awarded 33 blocks for extracting CBM but only three have started production so far.

While GEECL has been producing CBM for 10 years now, Essar Oil last year produced about 9,00,000 cubic metres a day from another block in Raniganj, RG(E)-CBM-2001/1. Reliance Industries (RIL) began gas production from its Sohagpur CBM blocks in Madhya Pradesh after winning extraction rights in 2002.

State-owned Oil and Natural Gas Corp (ONGC) has entered development phase in its four blocks including Raniganj (North). GEECL produces CBM from Raniganj (South) licence area, which covers 210 square kilometres, with 2.62 trillion cubic feet of gas reserves in place.

It has taken government to arbitration over its second asset of Mannargudi licence situated in Tamil Nadu as it was unable to begin work due to local protests. The block covers an area of 667 sq. km and 0.98 Tcf gas-in-place. Modi said GEECL, which began looking at the Raniganj block in 1993, will continue to scout for opportunities to invest in the unconventional assets, including shale.

“We continue to look but nothing serious is on the horizon as of now," he said. The government is looking at raising share of natural gas in the energy mix to 15% by 2020 from 6.5% now, in a bid to cut use of polluting liquid hydrocarbon fuels. CBM production is about 1% to the total gas consumption.

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