The Yogendra K. Modi-controlled company will also form a joint venture with Indian Oil (IOC) for a city gas distribution project covering six towns of Burdwan district. “We are in talks with IOC for the joint venture. The new entity may be formed this month,” company chairman Modi said.
The Raniganj block being developed by the company has reserves of 1.9 trillion cubic feet of coal-bed methane.
Great Eastern Energy expects to produce around 35 million cubic feet a day (mcfd) in the next two years. This will increase to 100 mcfd after the second phase of development.
The initial response from the field is encouraging. “We are getting more than expected, which is good news,” Modi said.
The company has identified four IOC retail outlets along the National Highway 2 near Asansol to sell CNG. It plans to expand this network. The proposed joint venture will transport gas from the nearest field to the six towns through a trunk pipeline. It will then be distributed to households, industrial units and automobiles.
The six towns are Asansol, Ranigunj, Burdwan, Barakar, Kulti and Durgapur. Great Eastern Energy has applied for gas distribution licences for these towns. The licences will be later transferred to the joint venture company.
Modi wants to use 25 per cent of the gas as CNG, 25 per cent for retail and small industry and the remaining for long-term customers.
Currently, Great Eastern Energy supplies gas to one company and is in talks with others. Some ceramic and glass units of western India are planning to set up shop in the region because of the availability of gas.
IISCO Steel Plant is also keen to source CBM from the company. A Great Eastern Energy pipeline will pass through the plant.
The company has already invested around Rs 175 crore through equity in 23 production wells. It now plans to raise Rs 300-350 crore through debt and overseas borrowings to complete the first phase of development.
by Sambit Saha