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Great Eastern to bid for city gas distribution

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Ajay Modi New Delhi
Last Updated : Jan 20 2013 | 1:04 AM IST

Great Eastern Energy Corporation Ltd (GEECL), the country’s first company to commercially produce gas from a coal bed methane (CBM) block, plans to enter a city gas distribution network through Great Eastern Energy City Gas Pvt Ltd, its sister concern.

“Our sister concern will bid for the city gas network in the Asansol-Durgapur region in West Bengal, for which bids have been invited by the Petroleum and Natural Gas Regulatory Board. If they win, we will supply gas to them from our Raniganj CBM block and it will be a forward integration for us,” said Prashant Modi, president and chief operating officer.

The Board recently invited bids for eight cities in four states. The last date is December 3.

Modi said the company would restrict its bid to Asansol-Durgapur, close to GEECL’s CBM block in Raniganj. The company had won the block in 2001.

“We have invested Rs 800 crore in the Raniganj block and will invest another Rs 2,000 crore in drilling more wells and ramping up production,” said Modi. The block is currently producing 0.1 million standard cubic metres a day (mscmd) and it is expected to reach 3 mscmd by 2015.

The company is supplying this gas to commercial entities in Asansol, Durgapur and adjoining cities. It has signed a franchise agreement with Indian Oil Corporation and Bharat Petroleum Corporation to set up CNG dispensing stations at their existing outlets in the region. The price of CBM gas, unlike gas produced from blocks under the New Exploration Licensing Policy, is market-driven.

In the fourth round of CBM bidding completed recently, GEECL won the Mannargudi block, near the city of Tiruchirapalli (Trichy) in Tamil Nadu. This block covers 691 sq km. and the effective area for CBM operations is 667 sq km. It is estimated to hold 0.98 trillion cubic feet of gas.

“We have committed to drill 30 wells in the Tamil Nadu block over the next five years. We will be investing Rs 100 crore in exploration work in our new CBM block. Further investments will depend on the discoveries that we make,” Modi said.

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First Published: Jul 31 2010 | 1:29 AM IST

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