Amongst all forms of gas, coal bed methane (CBM) is the least used and talked about in India despite the country's huge potential. It is an environment friendly clean gas with the similar properties of natural gas. It is generated during the formation of coal through the ‘coalification&rsqu o; process of vegetal matter.

Methane, the second most significant greenhouse gas after carbon dioxide, is blamed for ozone holes and global warming. It traps atmospheric heat about 21 times more than carbon dioxide. During coal excavation the trapped methane in the coal field gets released to the environment. Hence, conversion of this hazardous gas into a clean, environmental-friendly energy resource would be highly beneficial. It also increases mine safety for future coal mining once all methane is extracted and supplied as clean fuel.

Having the third largest proven coal reserves and being the fourth largest coal producer in the world, India has significant potential for commercial recovery of CBM. Prognosticated CBM resource has been estimated to be around 4.6 trillion cubic metre (TCM).

Under the gas utilisation policy, the D6-KG basin gas of 80 mmscmd has been allocated to priority sectors like fertilisers, power, and petrochemicals. The total sedimentary area for CBM exploration is around 26,000 sq. km. A total of 33 blocks covering 26,000 sq. km, with expected production potential of 38 mmscmd (million metric standard cubic metre per day) have been awarded under four bidding rounds, and two of these blocks have entered the development phase. Two blocks out of these have been relinquished by ONGC.

CBM has been a success in India as there are significant discoveries in the central and eastern parts of India. With the active participation of more CBM players, it is expected to bridge the demand-supply gap of gas in the near future. The projected CBM gas production by 2012 is 7.41 mmscmd. According to the sub-group committee report on natural gas, the demand for gas in India is estimated to grow from 180 mmscmd (6,356 mmscfd) in FY10 to 280 mmscmd (9,887 mmscfd) in FY12. Against this, considering the availability of gas from all sources, the estimated demand-supply gap works out to 50 mmscmd (1,766 mmscfd) in FY10 and 80 mmscmd (2,825 mmscfd) in FY12.

Commercial production of CBM is a bright prospect in those blocks where the produce can be supplied through a pipeline to nearby industrial hubs. Currently, commercial production of CBM is taking place only in the Raniganj (south) block of West Bengal of Great Eastern Energy Corporation Ltd. The region in and around the Raniganj block is heavily industrialised and has a huge demand for gas. The main alternative industrial sources of fuel are LPG, furnace oil, petrol and diesel, most of which are still considerably more expensive and polluting. Conversion of most industrial units from existing sources of fuel to gas is also a relatively cheap process with quick payback.

CBM can be used as a natural gas in small power plants and transport and as fuel for industrial use. It has helped in developing downstream gas-based industries. With government support, CBM can substantially contribute to India’s energy security and help curb emissions.

The writer is president & COO, Great Eastern Energy Corporation Ltd, Mr. Prashant Modi .

Great Eastern Energy Corporation Ltd. (GEECL ) was one of the first private sector company in India to monetize Coal Bed Methane (CBM) in the country. It entered into this business way back in 2001. At present it has two CBM blocks - one at Raniganj in West Bengal and the other at Mannargudi near Trichi in Tamil Nadu. Prashant Modi , COO shares his thoughts with InfralineEnergy about GEECL's growth plans, the sector's intricacies, and government's policies and strongly advocates free market price for attracting further investment in the CBM.

Edited excerpts.

Q1) What is your outlook on CBM over next five years?

Many of the CBM blocks are not producing at the moment. When all of them would be active, India would produce CBM gas to the tune of eight to 10 MMSCMD. Our own production from Raniganj block is expected to go up to three MMSCMD in the next five to six years.

Q2) How competitively is CBM priced in comparison to substitute fuels?

In order to sell anything it has to be competitive. It holds true for CBM as well. Lot of arbitrage is involved in selling it. The CBM price depends from customer to customer and it's a partnership for us.

Q3) The current CBM production is well below the projected 1.11 MMSCMD per day set by the government. Why has CBM production failed to pick-up?

It is difficult to project CBM production in the beginning, as there is no production history in India for any CBM. The duration for production processes such as deep watering is unknown. It could take two to three months or more.

For any sort of assessment, if you feed data in CBM software, it asks for your production history, which is non-existent. Based on little available data the software extrapolates. So, if I put my one-month-old production history data in the software, it will only produce a very theoretic figure. Based on such analysis it is difficult to predict whether one will be in a position to meet the projected targets.

It is because of this reason that we fell short of matching up the previously estimated production targets. While announcing the CBM production, the government had thought that it will have 20 CBM producing blocks. But some of these blocks haven't started production yet.

Q4) How long does it takes to produce from a block?

CBM block takes four to five years of initial work before you can get into production and development phase.

Q5) What are the critical enablers required for the growth of CBM in the country?

The government's policy on CBM is very simple and straight forward. It protects the interests of both the operator and the government. It should remain as it is. The policy allows for royalty contract and there is no cost recovery. So it's in operators' interest to increase production and efficiency.

At the same time, we do need some facilities that would help in the growth of CBM. We need to dig nearly 300 wells to produce three MMSCMD gas. If you are working on offshore wells, then one well alone would produce double the amount of this gas. Now, one has to connect these different wells. It requires transfer of rigs and heavy equipment. And for this one needs roads, which are unfortunately missing in most part of the country. Then, there are law and order problems in certain areas. All these are State subjects but if these can be addressed and get streamlined, it could accelerate the pace of CBM business.

Q6) How do you address such challenges?

We ourselves have built nearly 40 to 50 kms of roads till now. They are also for people's use and benefit the local economy.

Q7) How does Indian CBM market compare with the international market?

Comparison of CBM blocks at geographically different locations is not logical because geology changes from block to block. Each field is unique depending on quality of coal, amount of coal, amount of gas per tonne of coal. It also depends on saturation, permeability and several other factors. However, on a broader basis, one can compare different basins to benefit from global knowledge.

Also, if one block has one tcf of reserves and the other one has two tcf, it's not as if the second field is better than the first. This is so because owing to geology your cost of extraction could be less in a given field resulting in low production cost. In some other field the production cost could be lower owing to higher reserves. It ultimately boils down to per cubic feet cost.

In US, the fields such as Mannargudi, which are powder-river basin fields are big CBM producing areas. Then you also have black warrior basins which are like Raniganj field in West Bengal.

With different sort of geological structure one cannot say that black warrior is better than powder river or vice-versa. For example, Australia has good coal but the problem is that most of this coal is in areas where there is no market for it. China also has thick coal. The country has gas, but it lacks pipeline infrastructure. You have the resources, but if you do not have consumers or the pipeline network in place, then the big question is how do you commercialise your gas?

Q8) What is GEECL's initial assessment of Mannargudi block in Tamil Nadu? How much money GEECL plans to invest in it?

We won the block under the CBM - IV licensing round and signed the production sharing contract (PSC) last year. The work on Mannargudi will start in the last quarter of this year between October and December to complete our minimum work programme committed at the time of the bid.

As per the Directorate General Hydrocarbons' assessment based on the data available to them, the Mannargudi block is estimated to have 0.98 tcf of gas. Now, we need to do our work there and get the results.

However, currently we are fully engaged in developing our Raniganj block. As we are drilling and completing more wells, the production from the block is set to increase. As of now, the production in Raniganj stands at 0.16 MMSCMD.

Q9) What are the key overseas CBM markets that GEECL is looking at?

Indonesia is opening up. South Africa and China are also key markets. All these countries make for very virgin CBM territories. As and when more data comes out, one would be in a better position to take a call.

Q10) What are the challenges that you face in building pipeline infrastructure in remote locations?

Sadly the distribution infrastructure is not fully available in the country. And you have to set up your own infrastructure or pipeline to take the gas to your consumers through pipeline. Under the PSC, you are duly allowed to lay pipelines. In our business we have to connect internal wells to gathering stations and from there we have to lay pipeline outside the contract area to supply gas to consumers.

And nobody will come forward to set up a pipeline for CBM because it's a standalone business. In CBM the production takes eight to ten years to reach peak. With such a long gestation period, the pipeline operator would argue about how return on his investment would come. As a producer I cannot be expected to pay pipeline operator twenty times the existing tariff.

Q11) What are the possible solutions for developing pipeline infrastructure?

If I look at it as a standalone business, it's unviable investment proposition. But I see the investment made in building infrastructure network as an upstream asset investment. This is the only way to monetise my gas. It is a part of my project cost and it is spread over my wells over project production lifecycle.

Unless you own or have access to a pipeline, it is tough to take your gas to consumers. In case of our second acreage, the Mannargudi block a pipeline already exists in its vicinity. We do not have to invest money in creating a distribution network there. We will rather connect to the existing pipeline by paying the required cartage.

In case of Raniganj block, since pipeline infrastructure was non-existent, we had no option but to create our own pipeline infrastructure. In the US, unlike India, the grid already exists and the whole country is connected with pipeline network. All that a new player has to do is plug in at the existing pipeline at the desired location, get a meter and get money for your gas as it goes into the system.

Q12) The government is keen on gas pooling for various sectors. What will be its impact on CBM?

CBM is expensive business involving huge investments for exploration, drilling and establishing pipeline network. To recover costs and attract investment in the sector, we have to have free market price.

Take for example NELP IX. There were hardly one or two international bids. Oil and gas is a high risk business and people will only invest if they are assured of returns on their investment.

Our PSC is clear on free market pricing. We are not for gas pooling. Crude oil is attracting a lot of investment because the government has allowed crude oil to be traded at international free market price. LNG also sells at market price. Then there is no reason why CBM should be treated differently.

Why should there be any differentiation in gas prices when other fuels are being sold at market price. On the contrary being a cleaner fuel, gas usage should be further encouraged. The price should be best left to seller and the buyer. Why should operator expected to offer any subsidy to consumer? If Government wants to offer concessions to certain sections, it's their business.

Q13) PNGRB has fined GEECL Rs 25 lakh for illegal construction of pipeline in West Bengal? What is GEECL's stand on the issue?

As advised by our lawyers we are sure and confident that as per the PSC we are duly authorised to build a pipeline. Our PSC was signed in 2001 and according to our lawyers we are outside the purview of PNGRB since PNGRB came into force on July 16, 2010.

Our pipeline was completed in 2009. So, as per their act, even if we are covered under given regulations we are very much authorised to build and lay the required pipeline infrastructure. PNGRB argues that our spur pipelines are dedicated.

Moreover, in the Supreme Court judgment against PNGRB in IGL and Voice of India, the court has restrained the regulatory board to pass any order. The order is distinct as it says that PNGRB can process applications but it cannot pass any order. And this is why no further progress is being witnessed on City Gas Distribution.

Also, if I am not allowed to build pipeline infrastructure, then what am I supposed to do with my gas. The PNGRB Act governing pipeline infrastructure says if a player has been authorised to build pipeline before the Act came into existence the concerned player is deemed as authorised to build pipeline network.

The Act does not talk about dedicated pipelines. And PNGRB claims that our spur pipelines are dedicated pipelines. Rather it's the regulation that talks about pipeline. I wonder how regulation can overrule an Act. We have moved High Court on the issue and we did not argue on the merit of the issue instead we argued over jurisdiction of PNGRB. In fact, PNGRB has not even entertained our call to meet and present our merits on this particular issue.

Q14) What are GEECL's business plans for the next two years?

In Raniganj block, we will be investing close to Rs 2000 crore in the next five years. Our minimum work commitment at the Mannargudi block will cost us about Rs 100 crore during this fiscal. Initially our commitment towards Mannargudi block will be very less. However, depending upon the progress we make and the kind of results we get, in the long run it could see an investment of as much as Rs 3000 to 4000 crore. At present we have two fracturing units, two drilling rigs. By March 2012 the estimated production would be 500,000 SCMD, which is over 17 million cubic feet per day (MMSCFD).

Q15) How seriously is GEECL looking at Shale Gas?

We will look at the available opportunities as and when we come across them. The government is coming out with a policy on shale gas and once it does we will examine what the policy is. Depending on what blocks are on offer, we will accordingly take a decision.

(InfralineEnergy thanks Shri Prashant Modi, President and COO, GEECL for sharing his valuable insights with our readers. The column 'In-Conversation', is a platform to engage experts from various sectors to share their views on the different transformations in the Indian energy sector)
 

 

 

 

Chennai: Great Eastern Energy Corporation Ltd will start exploration for coal bed methane resources in Tamil Nadu.

Mr Y.K. Modi, Chairman and CEO, GEECL, told media persons on Tuesday that the company, which bagged the Mannargudi Block in the fourth round of CBM bidding by the Ministry of Petroleum and Natural Gas, will invest Rs 100 crore in the exploratory phase. The CBM resource here is estimated at 0.98 tcf (trillion cubic ft) by the Directorate General of Hydrocarbons.

The company will start with 50 exploratory wells and 30 production wells in the 691 sq.km block spread across Thanjavur and Thiruvarur Districts. Once commercial production starts, investment may go up to Rs 3,500 crore over the next few years.

GEECL, a part of YKM Holdings Group, is listed on the LSE and is the first private sector company into CBM operations in India, he said.

The company has invested about Rs 800 crore in a 210-sq.km CBM block in Raniganj, West Bengal, where it produces about 1,50,000 cu.m of gas a day. By 2016-17 the company will invest Rs 3,500 crore in this site.

The CBM is used as fuel by industrial customers in Asansol, Kulti and Durgapur. The company has also tied up with oil marketing companies to sell it as CNG for auto fuel, he said.

Start of commercial operations in Tamil Nadu would benefit industrial customers up to a 100-km radium of the resource.

According to an official press release, Great Eastern entered into an agreement with the Tamil Nadu Government to enable it start work at Mannargudi. The MoU was signed with the Industries Department in the presence of the Deputy Chief Minister, Mr M.K. Stalin.

The State Government has issued Petroleum Exploration licence to the Company and will facilitate implementation of the project. Apart from the revenue through royalty on gas, the project will generate 1,500 jobs directly and indirectly and make available CNG to Tamil Nadu.

Prashant Modi and YK Modi

Source: http://www.thehindubusinessli...

While the government is getting ready to auction shale gas exploration blocks, the country’s track record on the front of another unconventional gas source — coal-bed methane (CBM) — has not been very encouraging.

Compared to the expected production of 1.11 million standard cubic metre a day (mscmd) of CBM in 2010-11, the current production stands at only 11.71%, or 130,000 cubic metres a day. Gas production from CBM blocks of Reliance Industries and Great Eastern Energy are behind their approved plan due to issues like the lack of market access and land acquisition.

Of the three CBM blocks for which the development plans had been approved by the government, only one, belonging to Great Eastern Energy Corporation Ltd (GEECL), has started production, while the two blocks allotted to RIL in 2002 are still under development. According to the projections of the Directorate General of Hydrocarbons, CBM production was to increase to 7.41 mscmd by 2013.

Explaining the reason for the current level of production, Prashant Modi , president and chief operating officer of GEECL, said: “Unlike conventional oil and gas, where the initial production is high and then it drops, CBM production starts at lower level and increases with age. In CBM, there is no cost recovery like conventional gas blocks and, therefore, it is more in the interest of the producer to produce as fast as possible.” No data was available when the development plan was approved and production projection was based on ‘guesstimates&rsquo ;, he added. The block was awarded in 2001 and it went into commercial production in 2007. Director General of Hydrocarbons S K Srivastava was not available for comment.

RIL, which was awarded CBM blocks — Sohagpur (East) and Sohagpur (West) — in Madhya Pradesh, in 2002, had announced CBM discovery in 2005, but is still developing the blocks. In his AGM speech in 2005, RIL Chairman Mukesh Ambani had expressed optimism about commercial production from these blocks by 2009-10.

RIL did not respond to an emailed query on the status of CBM production. The company’s website says the development activities have been planned to commence in 2010-11 by drilling and completion of additional wells. Prolonged production testing was undertaken in the wells drilled in Sohagpur CBM blocks with favourable results. The plan for 2010-11 is to monetise the production capability from the present as well as the proposed wells.

CBM is natural gas found trapped within the coal formation. The gas is extracted by drilling holes into the coal seams that contain gas and are commercially unviable for coal mining. The government has so far held four rounds of bidding for CBM blocks and has awarded 33 contracts.

Minister of state for Petroleum and Natural Gas Jitin Prasada said current gas production from these approved blocks was lower than approved development plan, due to reasons like the lack of market in nearby areas, delay in laying of pipelines due to user right issues, land acquisition and law-and-order problems, among other things. “These issues are being sorted out and it is estimated that the total CBM production in the country is likely to increase to the tune of 5 mscmd in the next 2-3 years,” Prasada said.

Among other companies that announced CBM discoveries are Essar Oil and Oil and Natural Gas Corporation. Essar, which had announced earlier this year that its three CBM blocks held about 7 trillion cubic feet (tcf) of recoverable gas resources, had also not started production. It had said in March 2010 that CBM production would start in the second quarter of 2010-11.

Check more on http://www.shale-gas-asia.com...

Anchor: Prashant thanks so much for joining us. Please give us a quick hands up on the company for our viewers. You have invested around 800 crore in the Raniganj block and another 2000 crore for drilling up. What’s the outlook from here Prashant and what the investors should expect from the company?

Mr. Modi: Well, as you know we are the first commercial company to produce CBM in India and we have been sailing now for three years. About ten days ago in the recently concluded CBM fourth round; we were awarded a second block in Tamil Nadu (Mannangudi block) which has an effective area of 667 square kilometer which translates into 170 thousand acres. So the outlook is that we are developing the current field which is the Raniganj field and currently producing 3.6 to 3.7 million cubic feet of daily. The entire production after internal consumption is been sold to various industries. We are continuously developing the block and it will take 5 to 6 years to completely develop the block. It requires approximate 300 wells, we have drilled about 75 wells and around 30 wells are producing at present. As you may be aware, we are present in the entire value chain of upstream, midstream and downstream. So from the time we produce to the time it reaches the consumer the entire process in controlled by GEECL The outlook remains very positive and we are very confident. The production results we are coming as per our expectation or exceeding the expectations.  

Anchor: What is the ramp up plan going forward in terms of production?

Mr. Modi: Eventually once we develop the Raniganj field in next 5 to 6 seven years the production would cross 100 million cubic feet. The Mannangudi block is yet to be explored. However, the expectation is that once that is fully developed it will also produce in the range of 100 million cubic feet.

Anchor: Please give details on the financials. When the company will break even and how the financing will span out?

Mr. Modi: Well the business already has broken even and if you look at the numbers of first quarter the company has broken even in the EBIDTA level and also covering the interests now. On revenue basis the company is cash positive and going forward we have enough funds in hand to develop the blocks. The future expansion will be done through internal accruals which are more than sufficient to fund the operations.

Anchor: So you are not looking at any money raising plans now?

Mr. Modi: Yes, Currently we are not planning to raise any money. But once we start operations in the Mannangudi block and depending on what kind of results we get and how fast we develop at that point of time; if there is a need we could look at raising some money

Anchor: What kind of quantum do you have in your mind if you have to develop a whole new block?

Mr. Modi:  Our minimum requirement is in the region of 20-21 million dollars which is to be spent in a period of 5 to 6 years so once we start developing the block from the end of next year that takes us down to 2015-2016 and as I said depending on the results we could look at 50- to 100 million dollar raise at appropriate time. But in the sector of oil and gas everything is based on the results you get. So we are waiting for the results and once we feel that there is a requirement we will go for the most cost effective way raising capital whether it is equity and mix of equity and debt.

 ;http://www.youtube.com/watch?...

 

Calcutta, Aug. 25: Great Eastern Energy Corporation Ltd (GEECL), the first Indian company to commercially produce and sell coal bed methane (CBM), has achieved break-even in June.

The company, which produces CBM at Raniganj in Bengal, is expected to post a net profit for the first time since commencing production in 2007.

The Y.K. Modi company, listed on the London Stock Exchange, produces 3.7 million cubic feet of gas per day and supplies to around 20 units in the Asansol-Durgapur belt. It also sells CBM as compressed natural gas (CNG) through the petrol pumps of state-run oil retailers such as Indian Oil in the region.

Prashant Modi, president of GEECL, said the company had bettered last fiscal’s turnover in the first quarter of this financial year itself.

The company plans to ramp up production and will deploy a second rig by November. It has set a target of 100-120 million cubic feet of gas per day. Great Eastern Energy has invested Rs 700 crore in Bengal and intends to pump in another Rs 1500-2,000 crore. It has opened 75 wells and plans to open another 300 in the future.

The firm had planned an initial public offering in India and submitted a draft red herring prospectus to Sebi, which took 10 months to clear the proposal. By then it had raised $30 million in London by issuing fresh shares.

“After the overseas financing, there is no need for an IPO now. We will list here but have not decided on the time,” Modi said.

Permission delay

GEECL’s plan to expand its CNG network has hit a bureaucratic hurdle in Bengal. The company uses five petrol pumps of PSU oil firms to sell fuel to autos. Its application to sell at a BPCL outlet in Durgapur is lying at the district magistrate’s office for six months. It has been cleared by the chief controller of explosives, which looks after safety issues. The firm needs a licence from the district magistrate’s office to sell the gas.

Till now, GEECL has never faced any problem in getting state approval after receiving certificates from the chief controller of explosives.
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Bloomberg reported that Great Eastern Energy Corporation may raise money through a domestic initial public offering within 3 years while expanding exploration areas in the country.

Mr Prashant Modi president of Great Eastern Energy Corporation said that the company may produce as much as 120 million cubic feet a day at peak production. Great Eastern Energy is selling the gas at prices at least 62% more than what Reliance Industries Limited is allowed to charge for the fuel, based on data from Modi and India’s government.

Mr Modi said that "We will look for more acreages in India. The policies for oil and gas exploration in India are one of the best in the world."

Full year revenue almost quadrupled after boosting gas sales to INR 157.7 million from INR 40.1 million a year earlier. Gas under sales agreements rose by more than fourfold to 24.62 million standard cubic feet per day.

Mr Modi said that the completion of a 77.6 kilometer distribution network this year has opened up the markets of Asansol, Kulti and Durgapur in western India.

Great Eastern Energy said last month that it won a coal bed methane block in Mannargudi in Tamil Nadu state. The explorer is currently producing about 3.7 million cubic feet a day of gas from its existing block in West Bengal state. Coal bed methane or coal seam gas is natural gas extracted from a bed of coal.

(Sourced from www.bloomberg.net)

New Delhi: Great Eastern Energy Corporation Limited (“Great Eastern Energy”), a company involved in the exploration, development and production of coal bed methane in India is pleased to announce that, further to the announcement on August 13, 2009 regarding Pipeline Progress, it has successfully completed laying the entire pipeline on the Asansol-Durgapur sector resulting in a total pipeline of 77.47 km.  The Company is currently in the process of testing the remaining section, comprising 30.39 km, from Raniganj – Durgapur.

The total pipeline of 77.47 km comprises 11.8 km connecting the Gas Gathering Station (GGS) to the Central Gathering Station (CGS); 12.36 km connecting CGS to Kulti, and 53.31 km connecting Asansol (CGS) to Durgapur.
 
The pipeline system, which is capable of carrying up to 35 mmscfd at 15 bar pressure, is part of a vertically integrated network consisting of drilling, production, compression, transportation and distribution services.

Prashant Modi, President and Chief Operating Officer Great Eastern Energy, commented:

“The completion of the laying of the pipeline from Asansol to Durgapur is a significant milestone achieved by the Company and gives access to new market opportunities for Great Eastern Energy.  With the production potential of the license no longer in question the focus of the business has increasingly moved towards sales, marketing, and distribution.”

About Prashant Modi

Mr. Prashant Modi is currently the President & Chief Operating Officer of Great Eastern Energy Corporation Limited (GEECL). He has been associated with the company since its inception. He is responsible for the day-to-day operations of GEECL, and was also instrumental in the successful listing of the company on London’s AIM (Alternative Investment Market) exchange in December, 2005. He’s also on the Environment Task Force committee of the Federation of Indian Chamber of Commerce and Industry (FICCI).

Further information on GEECL can be obtained at www.geecl.com 

Disclaimer

Great Eastern Energy Corporation Limited is proposing, subject to market conditions and other considerations, a public issue of its equity shares and has filed its Draft Red Herring Prospectus (“DRHP”) with the Securities & Exchange Board of India (“SEBI”).

This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any equity shares, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Any potential investor should note that investment in equity shares involves a high degree of risk. For details, potential investors should refer to the DRHP filed with the SEBI including the section titled “Risk Factors”. The Equity Shares of the Company have not been and will not be registered under the U.S. Securities Act 1933, as amended or any state securities laws in the United States. This announcement may not be released in the United States.

This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act.

Great Eastern Energy Corporation Limited, a company involved in the exploration, development and production of coal bed methane in India is pleased to announce that, further to the announcement on August 13, 2009 regarding Pipeline Progress, it has successfully completed laying the entire pipeline on the Asansol-Durgapur sector resulting in a total pipeline of 77.47 km. The Company is currently in the process of testing the remaining section, comprising 30.39 km, from Raniganj – Durgapur.

The total pipeline of 77.47 km comprises 11.8 km connecting the Gas Gathering Station (GGS) to the Central Gathering Station (CGS); 12.36 km connecting CGS to Kulti, and 53.31 km connecting Asansol (CGS) to Durgapur.

The pipeline system, which is capable of carrying up to 35 mmscfd at 15 bar pressure, is part of a vertically integrated network consisting of drilling, production, compression, transportation and distribution services.

Prashant Modi , President and Chief Operating Officer Great Eastern Energy, commented:
“The completion of the laying of the pipeline from Asansol to Durgapur is a significant milestone achieved by the Company and gives access to new market opportunities for Great Eastern Energy. With the production potential of the license no longer in question the focus of the business has increasingly moved towards sales, marketing, and distribution.”

Review the latest Coal Bed Methane news and associated company profiles

Great Eastern Energy Corporation Limited, a company involved in the exploration, development and production of coal bed methane in India, announced that it has successfully commissioned its second natural gas pipeline extending 12.35 km from its Central Gathering Station in Asansol to Kulti, West Bengal from April 19 onwards. This is the Company's second Coal Bed Methane ("CBM") gas pipeline and will be part of a vertically integrated network consisting of drilling, production, compression transportation and distribution services.

This 12" steel pipeline is capable of carrying one (1) mmscmd of gas at 15 bar and will be catering to the requirements of customers in the Burnpur, Asansol, Neamatpur, and Kulti area.

Prashant Modi , President and Chief Operating Officer, Great Eastern Energy Corporation Limited , commented: "Great Eastern Energy is delighted to commission its second trunk pipeline connecting its Central Gathering Station to Kulti, thus achieving another milestone in the construction of its pipelines and midstream infrastructure."

As of January 27, 2009, the Company had laid 31.97 km of the MDPE pipeline within its license area, connecting 22 wells to the Gas Gathering station. A contract for connecting the other wells has been finalized and work is expected to start within the next three weeks.

The Company has also laid 24.27 km of the steel pipeline, as on April 15, 2009, which connects the Central Gathering Station in Asansol to Durgapur through the towns of Nigha and Raniganj. The pipeline upto Nigha is nearing completion and partial testing of the same has commenced.

BS reported that Great Eastern Energy Corporation Limited has commissioned the country's first natural gas pipeline based on coal bed methane in the state and quoted it was planning to increase the network of CBM gas pipelines across the industrial belt in the eastern region to get industrial and domestic users.

As per report, GEECL recently filed its Draft Red Herring Prospectus with the Securities & Exchange Board of India in December 2008 to raise around INR 800 crore but was yet to decide on the date.

The 11.8 kilometer CBM gas pipeline today connected its gas generation centre located at Shymadih to its central gas gathering station at Asansol in the Asansol Durgapur Development Authority industrial area, 210 kilometer west of Kolkata.

However, GEECL was drawing CBM from 23 wells linked to coal beds.

Mr Prashant Modi president & COO of GEECL said that it aimed to tap 100 wells in another 2 years and 300 to 400 wells in 3 years time.

According to a ball park estimate, 100 wells could produce 35 million cubic feet of methane gas per day.

It said that it had invested close to INR 350 crore till date in the first phase of the project. Mr Modi said that “We will extend this CBM network and supply the industrial belt of Durgapur, Burnpur and Asansol and sell to domestic users.”

The report added that GEECL would extend the CBM pipeline to Kulti and then tap the large commercial domestic market in Kolkata. The 12 kilometer stretch of the CBM pipeline, from Asansol to Kulti was 99% complete and would become operational in a month, while the third network link from Asansol to Durgapur would be operational in 6 months.

The present commissioned pipeline was part of a vertically integrated network consisting of drilling, production, compression, transportation and distribution services will be catering to the requirements of customers in Burnpur and Asansol area initially.

The report further added that GEECL had a franchisee agreement with Indian Oil Corporation for distribution of gas through four co-branded stations for now. It was in talks with IISCO and Kulti units of SAIL for supply. This pipeline was capable of carrying 1 million metric standard cubic meter per day of gas at 15 bar. It was today operating 31.97 kilometer of the pipeline linking 22 wells to the gas gathering station. It recently received the right of use from National Highways Authority of India for laying the 57 kilometer pipeline from Asansol to Durgapur.

Jan 28, 2009 – Great Eastern Energy Corporation Limited (GEECL) has successfully commissioned its first natural gas pipeline extending 11.8 km from its Gas Gathering Station to its Central Gathering Station in Asansol, West Bengal. It is slated to be its first CBM ( Coal Bed Methane) gas pipeline and will be part of a vertically integrated network consisting of drilling, production, compression transportation and distribution services.

This 12” pipeline is capable of carrying one (1) mmscmd of gas at 15 bar and will be catering to the requirements of customers in Burnpur and Asansol area. Further, this Trunk pipeline can feed other pipelines connecting Kulti towards the west and Durgapur in the east.

On this historic event, Prashant Modi, President and Chief Operating Officer, Great Eastern Energy, commented:

“Great Eastern Energy is delighted to commission its first trunk pipeline connecting its Gas Gathering Station to its Central Gathering Station, thus achieving a milestone in the construction of its pipelines”.

GEECL is a natural gas company focusing on the exploration, development, production, distribution and sale of natural gas from coal-seams commonly known as CBM. On the pipeline front, the Company observed that as on January 27, 2009 they have laid 31.97 km of the MDPE pipeline which connects 22 wells to the Gas Gathering station. It had also laid 11.82 km of the steel pipeline as on January 27, 2009, which connects the Central Gathering Station to Kulti, and is nearing completion. The Company has received the Rights of use (ROU) from National Highways Authority of India for laying the pipeline from Asansol to Durgapur, a stretch of 57 kms, and has started laying the pipeline on that route.

To know more about GEECL click Great Eastern Energy Corporation Limited .

To know more of about GEECL's President and COO click Prashant Modi .

Kolkata, October 24: The Great Eastern Energy Corporation Limited (GEECL), the first commercial producer of coal bed methane (CBM) in India, has opened its seventh CBM-based compressed natural gas (CNG) station at Neamatpur in Asansol on Friday.

The company has already signed a franchisee agreement for supply and retail of CNG through Indian Oil Corporation’s (IOC) petrol pumps in Asansol, Durgapur, Raniganj and other cities across the state. Overall there are seven CNG stations in the area, of which, four are the “mother stations” and three are the “daughter stations”.

Coal bed methane is considered to be of better quality than the CNG available in the market. It has 96 per cent methane, contains no sulphur and has very little carbon dioxide, while the natural gas contains about seven per cent carbon dioxide.

While automobile users will have access to clean fuel in the region, for users in Kolkata, there seems to be a long wait ahead. The company has spoken to the state government about extending CNG supply to Kolkata, which will be implemented gradually. It estimates a CNG demand exceeding 40 to 50 million cubic feet per day in Kolkata alone.

“We have begun with Asansol and Raniganj. Later, we will gradually extend it to Durgapur, Burdwan and Dankuni. It will take at least six months to extend the supply to Durgapur. Kolkata might take longer and as of now, opening a supply station in the immediate future is ruled out,” said Prashant Modi , president and chief operating officer of GEECL . Given the huge market for CNG in Kolkata, it is difficult to match supply with demand. Moreover, supply to Kolkata requires pipelines to be laid which could take some time. “Supply by truck-mounted cascades is not feasible for Kolkata, as trucks are not allowed into the city. Pipelines are the only option,” added Modi.

State Transport minister Subhas Chakraborty on Thursday had said that all autorickshaws, running on petrol or diesel, will be off the roads after December 31. Only autos fuelled by LPG will be allowed in Kolkata and other parts of the state.

 

Src: ExpressIndia - Express News Service

LONDON (Thomson Financial) - Great Eastern Energy Corp. Ltd. , said it has won a gas supply contract with SAIL Growth Works (part of Steel Authority of India Ltd.) for initial supply of 233 thousand cubic feet per day (MCFD) of gas, at a delivered price of $17.46 per million British thermal units(mmbtu).

The company involved in the exploration, development and production of coal bed methane in India, said the amount of gas supplied to SAIL Works is expected to increase significantly as gas production increases and the steel pipeline for the supply of the gas has been successfully laid.

In addition, Great Eastern has received confirmations from Kedia Group of Industries for the purchase of 1,801 MCFD of gas at a delivered price of $17.32 per mmbtu for an initial three year period and $17.49 per mmbtu for a further two years.

This will be the base price and the price will be revised again after 5 years, while the tenure of the contracts will be for 20 years, the company said.

Carbon credits arising from the contracts with Kedia Group will be available to Great Eastern and supplies of gas are expected to begin next year.

The company has also successfully renewed gas sales agreements for another year with those customers whose initial terms of agreement have expired. And the second drilling programme of 30 wells, as outlined at the time of the results in June, is also making good progress, with 9 wells drilled and a further 10th well currently being drilled.

TFN.newsdesk@thomson.com

To know about Mr Prashant Modi, the President and COO of GEECL. Visit the official website at www.prashantmodi.com.