The unconventional hydrocarbon resource CBM (Coal Bed Methane) can play a complimentary role in meeting energy needs in India. CBM availability is marginal as of now, compared with the
total energy demand in the country, says Prashant Modi, Managing Director, Great Eastern
Energy Corporation Ltd (GEECL).
The awareness of gas use as an alternative to using costly
and dirty fuels is low in the country, and Modi sees this as a challenge.
What is the total CBM production in India at
present & what role can this resource play in
India's energy basket in the years to come?
Current commercial production of CBM (Coal Bed
Methane) comes from GEECL. Total production of CBM by
GEECL amounted to 14.73 mmscfd (0.42 mmscmd) CBM
can play a complementary role in meeting energy needs.
As of now, compared with the total energy demand, CBM
availability is at best marginal which can supplement in
As Asia's first company to develop CBM assets,
what were the main challenges that GEECL
had to address at various stages of clearances,
exploration, development, production &
development of the assets?
Getting routine environmental clearances continue to be
long drawn out and these remain inhibiting factor, in
starting even exploratory drilling.
• What prompted GEECL to set up its own pipeline
infrastructure in Raniganj & challenges did
GEECL encounter while setting up the same?
GEECL decided to lay its own dedicated pipeline to
supply its gas production as there was no other pipeline
network available. Gas cannot be supplied efficiently
without pipelines up to the consumer end.
• As a CBM producer what kind of support do you
expect from the Government?
To abide by the production sharing contracts with the
operators and ensure free market pricing for gas as
mentioned therein. Further, all approvals should be
through a single window system.
What are the major challenges in monetising
CBM resources in India & which country has
most successfully developed their assets and
if India can emulate the same model?
The CBM areas generally have no pipeline network
and developing a customer base is a critical
challenge. There is low awareness of gas use as an
alternative to using costly and dirty fuels.
What is the current mechanism for CBM
utilisation & pricing in India & to what extent
can this fill for import substitute? May we
have your comments what best should be
done by the government to encourage faster
monetization of this resource?
CBM contract allow free market pricing and
government must ensure this. Pricing remains the
biggest incentive for investment in this sector.
In CBM, there is no cost recover y and we
pay Royalty/PLP on the sales as soon as the
commercial production commences. So, it is my
interest to increase production at the earliest as
we need to recover the cost.
What are the other challenges that need to
be addressed for smooth & fast execution
of development of CBM projec ts in
Clearances by various agencies of the government
should be given before any areas are mandated
to operators. This will immensely improve the
investment environment and hasten the process
There has been an ongoing debate on
whether oil & gas companies in the coming
days should be liable to pay the government
an agreed amount depending on the level of
output or not. May we have your opinion on
production-linked payment (PLP) system in
the prospective PSCs. Do you think it will be a
better proposition than cost recovery?
Yes. Royalty and PLP contracts appear to be the
Please apprise us about the progress on
Raniganj & Mannargudi blocks.
Currently, we are producing 14.73 mmscfd (0.42
mmscmd) of CBM gas from Raniganj (South)
block. We have already drilled 132 wells. The
block has about 2.35 TCF of gas in place. To exploit
the potential, we have to drill a total of 300 wells.
The Mannargudi Block covers an effective area
of 667 sqkm. and 0.98 TCF of gas in place as per
DGH. We are waiting for some final clearances to
start the work.
How is GEECL responding to the changing
market dynamics and realigning its growth
strategies? What are the challenges ahead
Having achieved a certain level of production,
GEECL is seeking to ramp up operations by
developing its current assets in the most time
efficient manner. Further, we will look for new
acreages which will be acquired only if those are
economically viable. We will not acquire just for
the sake of getting acreage.
With India slowly moving towards exploring
shale gas assets & development of CBM
already in progress, what difference do you
feel these resources will have in the long
term in securing the energy supplies in India
and in the overall cost of gas? Shale gas has
been an absolute game changer for the US.
Can we expect something like that for India
& what are the challenges that India will have
to address to go full throttle to exploit the
Unconventional hydrocarbons can play a big role in
securing India’s energy security. These are new areas
and therefore have to be carefully nurtured. Shale
gas can become a major source of energy, provided
these assets are developed to their full potential.
However, for these to be tapped and used, pipelines
should be developed. Shale gas production peaks
initially and therefore before any major development
of shale resources, pipelines should be planned and
put in place in advance of production.