New Delhi: Great Eastern Energy Corp. (GEECL) is looking at an investment of $2 billion for fully developing the shale resources at its Raniganj (South) block in West Bengal, according to a company statement.

This comes in the backdrop of India pushing for a gas-based economy, with more than 70% of India’s population across 400 districts to get access to city gas distribution (CGD) network once the work is completed after the 10th bidding round.

“The Company expects to start initial Shale gas exploration work of drilling core wells in the first half of next year. Depending on the results obtained and analysed from the core wells, we thereafter intend to drill an optimum number of pilot production wells," the coal bed methane (CBM) company said in its statement.

“Based on further results obtained and analysed from the pilot production wells, the total investment envisaged for the full development of Shale resources in our block could be in the region of $2 billion," the statement added.

To be sure, this investment is to be made over a period of 10 years.

Gas accounts for around 6.2% of India’s primary energy mix as compared to a global average of 24%, The National Democratic Alliance (NDA) government plans to increase its share to 15% by 2030. India’s gas demand is expected to be driven by the fertilizer, power, city gas distribution and steel sectors.

“It is heartening to see that when we listed on the LSE in December 2005 the OGIP (original gas-in-place) for our Raniganj (South) block was 1.39 TCF (trillion cu. ft), and now it has significantly increased to up to 9.25 TCF. Furthermore, with an undiscounted value of $13.78 billion and a discounted value of $4.31 billion, it is truly phenomenal," Prashant Modi, managing director and chief executive officer of Great Eastern said in the statement.

In what will help improve India’s energy security efforts, the NDA government allowed exploration of unconventional hydrocarbons such as shale oil and gas and CBM under the existing Production Sharing Contracts (PSCs), CBM contracts and nomination fields.

India’s energy demand has been growing. The Organization of the Petroleum Exporting Countries (Opec), which accounts for about 40% of global production, is of the view that global demand is expected to increase by 33%, or 91 million barrels oil equivalent per day (mboed), between 2015 and 2040. Of this, 24%, or a 22 mboed increase, is expected from India.

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