Great Eastern Energy Corp Ltd (GEECL) today said it has signed an agreement with the Tamil Nadu government for the development of gas reserves lying below coal seams (CBM) in the Mannargudi block in the state.
GEECL was in June 2010 awarded the Mannargudi block located near Tiruchirapalli in the fourth round of bidding for Coal Bed Methane (CBM) blocks.
"Under the Memorandum of Understanding, the Government of Tamil Nadu will provide for issuance of Petroleum Exploration Licence and facilitate necessary environmental clearances for the project," a company statement said.
Additionally, the state government will help the company in obtaining Right of Use for laying pipeline and other infrastructure facilities.
"GEECL will make an initial investment of up to Rs 100 crore during the exploration stage of Mannargudi block," it said. "Once the project viability is established, the company is expected to make substantial investments to the tune of Rs 3,500 crore depending on the commercial viability of the project."
Speaking on the occasion, GEECL Chairman and CEO YK Modi said: "We are the first company to commercially produce CBM in India and Mannargudi block in Tamil Nadu comes to us with a lot of promise."
GEECL is currently producing CBM from its block in Raniganj, West Bengal, which spans an aggregate area of 210 square kilometer. GEECL has already invested over Rs 800 crore in the block and plans to have large investments in the near future.
From its Raniganj block, the company is already supplying CBM to various industrial customers in and around Asansol/Durgapur, West Bengal and has also been supplying CNG to vehicles through India Oil Corp petrol pumps and has plans to start supplying CNG through Bharat Petroleum Corp Ltd outlets as well.
The Mannargudi block is spread over an area of 691 sq km and the CBM resource is estimated at 0.98 trillion cubic feet. GEECL plans to drill 50 core holes and 30 pilot wells in the region to begin with while further drilling will depend on the results of the initial phase.