Great Eastern Energy Corp. Ltd. (GEECL) is betting on shale gas prospects in the coalbed methane (CBM)-producing Raniganj South Block in eastern India. The company is looking to drill as many as 400 exploration and development wells in the onshore concession that is estimated to contain shale gas reserves of more than 1.68 trillion cubic feet (Tcf).

“GEECL intends to drill shale wells up to 3,000 meters [9,842 ft],” the London Stock Exchange-listed GEECL said in a proposal submitted to the environment ministry for approval. The mining company initially planned to drill 20 exploration wells in the Raniganj concession but increased the number to 400 following the discovery of more shale gas leads while developing CBM wells.

A study prepared by U.S.-based Advanced Resources International Inc. (ARI) indicated that Raniganj South has estimated in-place shale gas reserves of 6.13 Tcf, including at least 1.689 Tcf of recoverable reserves.

GEECL CEO Prashant Modi said the company would start drilling exploration wells at identified locations in the Raniganj South Block early next year. “Initial tests have indicated the potential. We will drill some pilot production wells before working on a field development for shale gas fields. A cumulative investment of $2 billion will be made in the coming 10 years,” he said.

“We believe that the shale gas resources can be explored and developed cost-effectively in tandem with our successful ongoing CBM development program through the sharing of surface and other infrastructure facilities,” the CEO added.

Raniganj South and its nearby areas in the Damodar sub-basin are believed to hold a significant quantity of shale gas resources. 

Essar Oil and Gas Ltd. last year discovered a “subsurface shale layer in the depth up to 3,000 meters [9,842 ft]” during a drilling campaign for CBM in the Raniganj East concession. It is estimated to have in-place shale gas reserves of about 7 Tcf, of which recoverable reserves are to be at least 1.5 Tcf.

ONGC Ltd. earlier found shale gas leads in the RNSG-1 well drilled to a depth of 2,000 m (6,562 ft) at Icchapur village in the Raniganj CBM block. The well encountered the Barren Measure shale formation from 985 m (3,232 ft) to 1,843 m (6,047 ft).

Modi also said GEECL would seek a technology partner to develop the proposed shale gas wells.

CBM Expansion

GEECL has also sought approval from the environment ministry to drill an additional 150 development wells for CBM in the Raniganj South concession along with the proposed 400 wells for shale gas.

The integrated development plan, estimated to cost Rs 277 billion (US$4.01 billion), includes construction of five gas gathering station, five central gas stations, more than 100 km of gas pipelines and associated production units.

These development wells are to be drilled along with the ongoing 200 development well campaign for CBM in Raniganj South. The aim is to increase production to about 25 million standard cubic feet per day (MMscf/d), from the current level of 17 MMscf/d.

Raniganj South is estimated to contain in-place CBM resources of 2.62 Tcf.

The operator currently produces about 17 MMscf/d of CBM from 156 wells in Raniganj South via two gas gathering stations and one central gas station. It supplies the produced gas to industrial and retail consumers in the Asansol-Raniganj-Durgapur industrial belt in West Bengal state through its 229-km pipeline network.

The company has set a target to produce 100 MMscf/d of CBM from the Raniganj South block by 2025.

GEECL is the operator with 100% participating interest in production-sharing contract (PSC) for Raniganj South that is valid till 2036.

Policy Support

The Indian government is encouraging upstream companies to expedite efforts to establish potential shale oil and gas resources in sedentary basins like Cambay, Krishna Godavari, Cauvery and Indo-Gangetic because of increasing gas demand in the country.

During a meeting in February, the regulator directorate general of hydrocarbons urged both state-run and private companies to develop potential unconventional hydrocarbons, including shale gas, shale oil and hydrates, in existing PSCs for oil, gas and CBM blocks.

New policy guidelines have been introduced to enable the realization of prospective unconventional hydrocarbon resources in the existing PSCs which otherwise remain unexplored and unexploited. The new fiscal and contractual terms provide for ring-fencing of petroleum operations and cost recovery of new hydrocarbon discoveries.

India is estimated to contain potential shale gas resources of between 300 Tcf and 2,100 Tcf in six sedimentary basins, according to Schlumberger.

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