The Ruias-controlled Essar Energy has lined up an investment of Rs 5,500 crore ($1 billion) over the next five years to produce gas from its coal bed methane (CBM) blocks in West Bengal, Jharkhand, Madhya Pradesh and Orissa.
"We are producing gas at the rate of 60,000 standard cubic metres (scm) per day and are confident of producing 3 million scm a day by the end of the next year from our Raniganj block in West Bengal," Iftikhar Nasir, the CEO of Essar Energy (E&P) told HT in an exclusive interview.
He said the company is looking to produce 6-10 million scm of gas a day in the next five years from its five CBM blocks.
Essar Energy is set to develop the Rajmahal block in Jharkhand, which is two to four times bigger than the Raniganj block. It has more one block in Sohagpur, Madhya Pradesh and two more in Talcher and Ib valley in Orissa.
"The total estimated gas reserves in these five CBM blocks are around 10 trillion cubic feet (tcf). Raniganj alone is around one tcf," Nasir said.
These estimated gas reserves can add major revenues for Essar as the government has already announced a new gas pricing policy, in line with the Rangarajan committee recommendations, which will fetch producers around $8 per million metric british thermal unit (mmbtu) of gas, as against the existing $4.2-6.79 per mmbtu.
Essar has been supplying small quantities of gas from Raniganj to local industries.