Mozambique's ENH To Search For CBM Reserves

Mozambique plans to search for coal bed methane, with rough estimates forecasting a potential of well above 1 trillion cubic feet, the head of the oil and gas firm ENH said on Thursday.

Nelson Ocuane, chief executive and chairman of state-owned Empresa Nacional de Hidrocarbonetos (ENH), said the company plans to approach coal explorers in the country including Riversdale and Vale to help search for CBM.

"The concept of commercial CBM production is gaining ground. The idea is to do it together," Ocuane told an African oil conference in Cape Town.

"Estimates of recovery of CBM could be well above 1 tcf."

Ocuane said a $400 million upgrade of the onshore Pande and Temane gas production facilities, in which ENH has a 25 percent stake, to increase annual production capacity to 183 million gigajoules from 120 million GJ would be completed next year.

Ocuane said the south African state had a vast, yet largely unexplored gas potential, although there was exploration in its northern and southern basins.

Next week the Petroleum and Natural Gas Regulatory Board (PNGRB) will invite bids for India's first trunk pipeline for carrying coal bed methane.

Though the PNGRB nomenclature describes the pipeline as the Asansol-Howrah (West Bengal) 270-km gridline, in reality the pipeline will connect the entire coal bed methane (CBM) producing zones in Jharkhand and West Bengal to the consumption centres in Kolkata in the South East, through spur pipelines.

An extension of the trunk pipeline may reach the industrial districts of Haldia around 100 km Southwest of Kolkata, the proposed terminal point of Kakinada-Haldia trunk pipeline of Reliance.

“We will open the Asansol-Howrah and 1,700-km Paradip (Orissa)-Surat (Gujarat) trunk pipeline projects for bidding next week,” the PNGRB Chairman, Mr L. Mansingh, told Business Line in a recent interview.

Expression of Interest

The invitation for the bids are based on an expression of interest submitted by Essar Oil Ltd., which has extensive CBM interests in the region. Great Eastern Energy and ONGC are also CBM producers in the region.

While Essar sources refused to comment, sources said that the company proposes to build a pipeline of 4 mmscmd capacity.

Mr. Mansingh said that considering the large number of CBM blocks under exploration in the eastern region and the reserve accretions reported by E&P companies in operation, the regulator was in favour of setting up a pipeline of greater capacity to exploit the economic benefits of CBM in the region.

Possible Creation of Bengali Gas Market

While the Asansol-Howrah pipeline may finally create a gas market in West Bengal, the regulator is particularly upbeat about the economic benefits of the proposed Paradip-Surat trunk pipeline — connecting the gas bearing region (Mahanadi basin) in coastal Orissa in the East to the consumption centres in the West.

“This pipeline may prove to be a game changer for the underdeveloped and Maoist-affected regions in Central India by creating fresh opportunities for economic development,” Mr Mansingh added.