Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 9 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
Essar signs 15-year gas sale deal with GAIL
August 10, 2018
 Print    Send to Friend

NEW DELHI: Ruia brothers-led Essar Oil and Gas Exploration and Production (EOGEPL) on Thursday announced that it has signed a 15-year Gas Sale and Purchase Agreement (GSPA) with state-run gas utility GAIL.

The Essar Group subsidiary said in a statement that GAIL had won the bid for the contract which will help EOGEPL monetise its entire coal bed methane (CBM) production of 2.3 million standard cubic metres per day (mscmd) from the Raniganj East block.

“The GSPA entails a 15-year gas supply contract whereby the company will be able to monetise its entire coal bed methane (CBM) production of 2.3 mmscmd from the Raniganj East block at a globally competitive price,” Essar said.

“GAIL emerged winning bidder by offering to pay gas prices linked to three-month average price of Brent crude. The discovered price will lead to a substantial increase in the Company’s (EOGEPL) topline,” it added.

Production

Of the 500 wells to be dug at the Raniganj East CBM block, EOGEPL has already completed drilling of 346 CBM wells. “The Raniganj East block is India’s most prolific CBM block that has achieved gas production of more than 1 mscmd, which will be gradually scaled to 2.3 mmscmd,” it said.

Commenting on the development, EOGEPL Chief Executive Vikas Tawde said: “On an upside, shale development would benefit greatly due to the synergy with CBM operations, like water requirement, and the gas evacuation and handling facilities.

“Initial estimates indicate that we would need to invest close to Rs7,000 crore for developing the shale gas potential in the block to recover about 1.6 tcf (trillion cubic feet) from the field.”

Further development of CBM in the Damodar Valley Basin of eastern India is imminent with the likes of ONGC, GEECL and Coal India also joining the search for CBM and shale, the statement added.

Earlier worried over an inordinate delay in the resolution of Essar Steel’s debt, Indian lenders are taking legal opinion on how to settle the Rs 60 billion debt of Uttam Galva Steels (UGSL). Insolvency proceedings of UGSL is pending before the National Company Law Tribunal (NCLT) in Mumbai since December last.

The delay in UGSL resolution is because ArcelorMittal, a co-promoter till February this year, has promised to repay the debt, provided it wins the race for another bankrupt company — Essar Steel.

ArcelorMittal was holding a 29 per cent stake in Uttam Galva Steel till February this year and was deemed ineligible by the resolution professional of Essar Steel to bid for Essar Steel as UGSL was a bank defaulter. The Insolvency and Bankruptcy Code (IBC) law debars defaulters to bid for any bankrupt company in India. The Essar Steel matter is pending in the National Company Law Appellate Tribunal (NCLAT) after ArcelorMittal appealed. This case has also delayed the resolution of UGSL, say bankers.

According to a source close to the development, banks don’t want to wait indefinitely for the resolution of UGSL as the Essar Steel case is expected to be appealed before the Supreme Court by both or either of the bidders − Numetal Mauritius and ArcelorMittal – if their bids are rejected by the NCLAT.

Agencies

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
Related Stories
India's August oil imports jump 15.8% to 4.7 million bpd
NEW DELHI: India imported about 4.7 million barrels per day (bpd) of oil in August, up 15.8 per cent from the same month last year, according to data from shipping and in..
Weak rupee subdues Indian equity indices
MUMBAI: High crude oil prices and negative global cues pulled the Indian rupee to a new record low of 71.43 per US dollar in the late on Tuesday afternoon. The Indian ..
Iraq’s Somo close to JV with Zhenhua for crude oil
BAGHDAD/BEIJING: Iraq’s state oil marketer Somo is close to a deal with China’s state-run Zhenhua Oil to boost the OPEC member’s crude oil sales to the world’s top oil im..
IndianOil profit jumps 51 per cent
MUMBAI: State-run Indian Oil Corporation (IndianOil) on Saturday posted a consolidated net profit of Rs7,175.59 crore, up 51 per cent year-on-year, for the quarter ended ..
Edible oil traders use free-trade pact to escape India’s tax hike
MUMBAI: Edible oil traders are sourcing exports of palm oil and other cooking oils to India from neighbouring countries, designating the supplies as duty-free under a reg..
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright