GAIL and Essar Oil have firmed up plans to tap gas reserves in West Bengal, which is likely to bring opportunities for the state to attract sizeable investments. Essar Oil CEO Iftikar Nasir, on the sidelines of the Bengal Leads Summit-2013, said the company targets to dig 360 coal bed methane (CBM) wells in the Asansol-Raniganj area by the end of 2013, which will enable it to produce 3,000 million cubic meters of gas per day.
“This can supply the industry with the cheapest form of fuel and there is huge demand for it,” Nasir said.
GAIL director AK Pal said the company has embarked on a study for excavating gas from the coastal belt between Haldia and Digha. It was planning to set up a floating gasification terminal in the area.
Pal said that the study was expected to be completed in 3-5 months, after which GAIL would finalise the floating terminal project.
While Essar has already finalised an investment plan of R3,000-crore for the first phase, GAIL has estimated a R2,000-crore investment for the floating gasification project, though it is yet to finalise it. Pal said the findings in Bengal’s coastal belt could substitute KG Basin gas, and that much of the R7,600-crore Haldia-Jagdishpur pipeline’s fate depended on it.
GAIL planned the 2,050-km long Haldia (West Bengal)-Jagdishpur (Uttar Pradesh) pipeline on the basis of KG Basin findings. But uncertainties around getting gas from the KG Basin have brought the pipeline project to a halt.
“If we are able to strike gas in Bengal's coastal belt, we will revive our pipeline project,” Pal said.
Nasir said Essar would plan further investment in the state after it completes its first phase of digging 360 wells and extracting CBM from them. “Essar’s investment in the state could be in excess of R5,000 crore,” Nasir said, adding that there was already huge demand for the gas and the company would create pipelines to supply it to the industry.
Matrix Fertiliser, which proposed setting up a R5,000-crore fertiliser plant in the state, has already tied up with Essar for buying gas from the latter. Nasir, however, reserved his comments on the pricing issue.