Reliance Industries to inject ₹1,000 Crore in its CBM blocks

21 Aug 2024 , 01:13 PM

According to industry sources, Reliance Industries (RIL) plans to invest over ₹1,000 Crore in coal bed methane (CBM) blocks in Sohagpur, Madhya Pradesh to increase gas output from the fields. 

RIL plans to increase production to 1 million standard cubic meters (mscmd) per day over the next three years, according to an industry official. The company will invest over ₹1,000 Crore in the process.

CBM is natural gas that has been stored in coal seams and extracted by drilling wells into them before being compressed and used for a variety of home and industrial purposes.

RIL has two CBM blocks in Madhya Pradesh that cover 995 square km. In its FY24 annual report, RIL stated that over 300 wells are in production, with an average output of 0.64 mscmd of gas per year. In FY23 and FY22, RIL’s average block production was 0.73 mscmd of gas. In FY21 and FY20, it was 1 mscmd.

In February, RIL ran an online auction to sell the 0.90 million standard cubic meters of gas per day that it will produce from the Sohagpur block. Gail (India) Ltd, the state-owned gas utility, and Indraprastha Gas Ltd, the city gas distributor, have taken the majority of the gas. The bid was made for $11 per million British thermal units.

“Reliance Gas Pipeline Limited, a subsidiary of RIL, operates the 302-kilometer Shahdol-Phulpur Pipeline, which connects CBM gas reserves to the national gas grid. This gives consumers access throughout the country,” RIL stated in its annual report.

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