Essar Oil seeks nod for CBM gas pipeline in Bengal

Essar Oil plans to lay a 160-km pipeline from Durgapur to Kolkata in West Bengal to transport gas from its coal-bed methane (CBM) blocks to consumers in the state. The company has applied to the sector regulator Petroleum and Natural Gas Regulatory Board (PNGRB) for permission to lay a 24-inch pipeline from Durgapur to the state capital.

The company is likely to start producing gas found below coal seams from its Raniganj block in West Bengal this quarter. The initial output is likely to be 9,000-10,000 cubic meters per day, with peak production of 3.5 million standard cubic meters envisaged in mid-2013. The peak output will last for 20 years.

"In order to sell the entire production potential of the block we propose to supply CBM in Kolkata region," Shishir Agrawal, head of Essar Exploration's production division, said in the 13 January application to PNGRB. A special purpose vehicle would be set up for executing the project, Essar said.

Besides Raniganj, the pipeline may also be used to transport gas from Essar's Rajmahal CBM block in neighbouring Jharkhand. Raniganj is the country's oldest coal-mining zone.

The block is located about 150 km from Kolkata near the steel city of Durgapur in Burdwan district.

Agrawal said 15 test wells have already been drilled in Raniganj and 500 more are planned. "Initial estimates suggest that the demand en route the pipeline will be about 3 mscmd."