RIL starts commercial production from its Madhya Pradesh CBM field

RIL expects to drill 600-800 wells and develop associated infra over next phases of development

Mukesh Ambani-led Reliance Industries has started commercial production of coal bed methane (CBM) from its Sohagpur fields in Madhya Pradesh.

CBM is currently being supplied for commissioning the Shahdol Phulpur Pipeline (SHPPL). “The production, which started on March 24 this year,  will gradually ramp-up in the next 15-18 months making RIL among the largest unconventional natural gas producers in India,” the company said in a statement today.

RIL was awarded the licence to explore two adjacent CBM blocks SP (West) and SP(East) with an area of 995 square kilo meter in the first round of CBM block bidding by the government of India in 2001. The company has drilled more than 200 wells connected to two gas gathering stations in the first phase of development.  RIL expects to drill 600-800 wells further and develop associated infrastructure over the next phases of development.

Reliance Gas Pipelines Limited (RGPL) a wholly owned subsidiary of RIL, laid a 302 km Shahdol Phulpur Gas Pipeline that connects Sohagpur CBM fields from Shahdol to Hazira-Vijaipur-Jagdishpur (HBJ) pipeline Network of GAIL at Phulpur. With this new pipeline network these CBM Gas fields are now connected with the Indian Gas Grid.

This comes after the recent Cabinet decision that allowed companies producing CBM to sell gas to its own affiliates, by giving marketing and pricing freedom for CBM. As per the decision, while discovering the market price for arms length sales, the contractor has to ensure a fully transparent and competitive process for sale of CBM with the objective that the best possible price is realised for the gas without any restrictive commercial practices.

Though, about 33 CBM blocks were awarded so far in India, gas is produced only in four of them. The overall production of CBM from the four blocks comes to around 1.17 million standard cubic metres per day, while India is expected to have overall reserves of about 92 trillion cubic feet.