India's Great Eastern Energy Corporation (GEECL) has set its sights on what could be the country's first shale gas development after winning environmental clearance to start an exploration campaign on its Raniganj (South) block in West Bengal.

The London-listed player is hoping that the clearance for the initial phase of development will be followed by the remaining outstanding approvals within the next three months.

The company has drawn up plans to invest up to $2 billion in the development of shale resources at the West Bengal block.

Chief executive Prashant Modi told Upstream that the recently obtained environmental clearance relates to the drilling of initial core wells on the block.

“Depending on the results, we would move forward in terms of additional core wells and (eventually) producing wells,” Modi said.

GEECL said that it remains upbeat on India’s shale gas potential despite the Covid-19 outbreak and lower commodity prices.

Modi said that India’s gas demand remains robust and shale gas production from its West Bengal block could transform the coalbed methane specialist's fortunes.

GEECL has already started engaging with various vendors relating to commencement of the shale exploration programme and is hopeful that the upcoming Jagdishpur-Haldia gas pipeline will be operational by the end of the year, which would provide a connectivity boost at Raniganj.

“The pipeline will provide the company with the opportunity to expand its customer base and sales significantly by accessing the huge market of Kolkata and also to the wider state of West Bengal,” it said.

The company is likely to earn a market-linked gas price for any potential shale gas from the Raniganj (South) acreage in the future.

GEECL had plans to initiate shale gas exploration at the Ranigang (South) block last year but those plans have seen several delays.

Modi said that the Covid-19 lockdown in India since March has also impacted its approval process for shale gas exploration.

GEECL is the first Indian player to have commercialised CBM production and the company aims to capitalise on this expertise to expedite shale gas development in the country.

Modi earlier told Upstream that “shale gas resources can be explored and developed cost-effectively in tandem” with its ongoing CBM development programme through the sharing of surface facilities and other infrastructure.

In 2018, the Indian government allowed existing CBM producers to explore and exploit all forms of hydrocarbons, including shale resources.

The revamped policy by the Indian government has prompted private sector explorers such as GEECL to plan initial exploration programmes for shale gas reserves.

An assessment carried out by US-based consultancy Advance Resources International (ARI) in 2018 for the Raniganj (South) block gives a high estimate of shale resources of up to 6.63 trillion cubic feet of gas.

CBM resources in the block remain at up to 2.62 Tcf, according to the ARI report.

The report increases the original gas in place at Raniganj (South) to up to 9.25 Tcf, GEECL has said.

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