Great Eastern Energy Corporation Ltd, a part of YKM Holdings Group, has asked the Ministry of Petroleum and Natural Gas to exempt all coal bed methane operators from seeking approval of the Petroleum and Natural Gas Regulatory Board for laying pipelines that will supply gas to the end users.
In a letter to the ministry, GEECL noted that most of the CBM blocks are in areas where the pipeline infrastructure is not in place. Besides, the quantity and pressure of CBM is low and is mostly supplied in the vicinity of the block itself. The buildup of the production is slow and reaches full capacity in eight to 10 years. The upstream operator has to establish the pipelines as no other company is willing to invest in a small network of pipelines that will reach full capacity in around a decade. As a result, the developers have no option but to lay their own dedicated pipelines to monetise the gas supplies.
The Gurgaon-based company is the operator of Raniganj (South) CBM block near Asansol in West Bengal. The company started commercial production of CBM in July 2007 and subsequently sold gas in the domestic market. However, in the absence of pipeline infrastructure the company began laying dedicated pipelines from its block.
GEECL had applied to the petroleum ministry and PNGRB for necessary approvals for laying the pipelines. However, PNGRB informed the company that its pipeline network did not fall under the category of 'dedicated pipelines' and invited the company for a formal hearing before the Board. Till then, the company has been asked to stop any incremental activity of laying pipelines in the Durgapur area.
In its appeal to the petroleum ministry, the company said that this action on the part of PNGRB was detrimental to the interests of GEECL and the central government and was also prejudicial to the interests of the consumers as well as against the provisions of the CBM contract, possibly resulting in flaring or wastage of CBM gas. The company, therefore, asked the ministry to consider exempting all CBM developers from seeking PNGRB's approval before laying the gas pipelines.
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