Reliance Industries taps coal bed methane

RIL ready for methane mission


Mumbai, July 7: After making a play for shale gas in the US, Reliance Industries Ltd (RIL) has turned homewards to tap into another unconventional source of energy — gas trapped in coal bed seams. The company has floated a tender inviting expressions of interest from companies that supply equipment to develop coal bed methane blocks (CBM). Reliance Industries has five coal bed methane blocks in the states of Madhya Pradesh, Rajasthan and Chhattisgarh. The company hopes to extract gas from these blocks and expects to drill 100 wells in the next five years to a depth of up to 1,700 metres.

RIL is also inviting expressions of interest for the development of onshore exploration blocks that were awarded by the government under oil block auctions Nelp II and Nelp V. The company has issued the tender on behalf of itself and its partners for these blocks that include Oil and Natural Gas Corporation, Okland Offshore Holdings, Hardy Exploration and Production (India) Inc and Tullow India Operations Ltd. The deadline for submission of expressions of interest is July 21.RIL has already achieved commercial production of 60 million standard cubic metres per day (mmscmd) in the deep sea KG-D6 basin and now wants to tap unconventional sources of energy where it might not have to splash out huge sums of money to hunt for gas.

So far it has entered in two joint ventures in the US — with Atlas Energy and Pioneer — to develop shale gas. Sources say the company is engaged in talks with another shale gas player in the United States. If that deal materialises, it will be RIL’s third joint venture for shale gas. RIL declined to comment on this potential venture. The fact that RIL intends to develop gas (methane) trapped in the surface of coal is significant as there has been very little extraction from these CBM blocks which were awarded in auctions held in 2001 and 2003.

While replying to questions on CBM projects, petroleum minister Murli Deora had told the Lok Sabha in late April that commercial production of CBM had started in July 2007 at Raniganj (Bengal) where S.K. Modi-owned Great Eastern Energy Corporation Ltd has been exploring the gas block. In 2009-10, 38.40 million standard cubic metre of gas was produced from Raniganj, twice that produced in the previous year. Great Eastern Energy is listed on the London Stock Exchange Alternative Investments Market.

Deora had said in April that based on the current estimates and status of planned field development, CBM production in the country was likely to touch 7.41 million standard cubic metre per day in 2012-13. The CBM policy was approved in 1997 to tap this unconventional source of energy. Twenty-three CBM blocks have been awarded in the first three rounds of auction. The fourth round was launched recently with an offer of 10 blocks covering nearly 5,000 sq kms. In all, 26 blocks have been awarded — two of them under nomination basis to ONGC — and the estimated resources in these blocks amount to 1,480 billion cubic metres.

In March, the government was reportedly concerned over the slow pace of development of these coal bed methane blocks. It had mulled the idea of taking back the undeveloped CBM blocks from investors and hiving them off as coal mining projects. The coal ministry also debated on simultaneous exploitation of coal and CBM in a single block. It even proposed vertical separation of land tracts for CBM and coal mining by different developers.
…….from the pages of The Telegraph newspaper…