Great Eastern Energy Corp (GEECL) will invest up to USD 2 billion over the next 10 years in its Raniganj (south) block in West Bengal to exploit shale gas reserves, its chief executive Prashant Modi said.
GEECL's coal-bed methane (CBM) block may hold as much as 6.63 Trillion cubic feet (Tcf) of shale resources, of which about 1.7 Tcf can be recovered, he said.
The company expects to start initial shale gas exploration work of drilling core wells in the first half of next year.
"Depending on the results obtained and analysed from the core wells, we thereafter intend to drill an optimum number of pilot production wells.
"Based on further results obtained and analysed from the pilot production wells, the total investment envisaged for the full development of shale resources in our block could be in the region of USD 2 billion," he said.
The shale resources are in addition to 2.62 Tcf of coal seam gas or CBM resources in the block. These have "an undiscounted value of USD 13.78 billion and a discounted value of USD 4.31 billion," he said.
While coal-bed methane, or coal seam gas as it is also known, is a form of natural gas that is trapped in the carbon structure of coal seams, shale gas refers to natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich sources of petroleum and natural gas.
GEECL produces 0.55 million standard cubic metres of coal gas (CBM) from 156 wells on the block. Peak output is envisaged at 2.5 mmscmd from 300 wells in 7-8 years.
Modi said the company has reached an initial understanding with GAIL (India) for either entering into a gas offtake agreement or a gas transmission agreement through the state-owned firm's upcoming Jagdishpur-Haldia & Bokaro-Dhamra pipeline.
This pipeline is expected to be operational by early 2020 and will potentially give GEECL access to a much larger market for its gas in and around the city of Kolkata.
"These are exciting times for the company as we are at the cusp of taking the next big leap in our operations," he said. "Along with our ongoing programme for CBM development, we are eagerly looking forward to undertake exploration and development of the shale gas resources in our Raniganj block."
Modi said when GEECL was listed on the London Stock Exchange in December 2005, the in-place gas resources in the Raniganj (south) block was 1.39 Tcf, and now it has significantly increased to up to 9.25 Tcf. These go up to 10.23 Tcf if the in-place resource of GEECL's Mannargudi block is also included.