YK Modi-promoted Great Eastern Energy Corporation Ltd is eyeing a joint venture with Indian Oil Corporation for setting up pipelines for gas distribution for industrial and domestic use in West Bengal. The company also expects to invest Rs 4,000 crore over the next five to seven years in its project.
Great Eastern Energy has the rights to coal bed methane blocks in the Asansol area and has already drilled 20 wells and plans to drill a total of 300 wells in the block.
Chairman and chief executive officer YK Modi told
: "We waited for Gail India Ltd to build the pipeline. But now we will do it on our own with Indian Oil as our partner. We will also seek their partnership in city gas distribution in six cities in the areas."
Great Eastern is the first company that has started coal bed methane gas and is ahead of Reliance Industries on this count. The company is also the first one to make compressed natural gas available in West Bengal. It will also be selling CNG through the Indian Oil petrol pumps in the area.
Modi further said that the company is planning an Indian listing within a year and will raise a small amount like Rs 100 crore for the purpose.
He said: "We will do some capital infusions till 2010. We plan to spend Rs 15 crore a month for the next two and a half years and then Rs 30 crore a month after that. From 2010 we will be generating more cash than we can invest."
The company is also looking to go global after having failed to get more CBM blocks in the last round of bidding. He is looking at Africa and central Asia. The company is selling its gas at a negotiated price already and is offering it an average price of $7-8 per million metric British thermal units (MMBTU). Modi added that the company is also talking to Steel Authority of India Ltd for the use of its air-strip at Burnpur which will create easy accessibility to the drilling area for the company and its executives. The company is currently using engineers from all over the world for the drilling.