Reliance Industries to Pump ₹1,000 Cr into Madhya Pradesh CBM Blocks to Boost Gas Production

Reliance Industries (RIL) plans to invest over ₹1,000 crore in its coal bed methane (CBM) blocks located in Sohagpur, Madhya Pradesh. This investment aims to increase the production of CBM gas from these fields, according to industry sources familiar with the situation.

RIL has observed a decline in CBM production and intends to drill several new wells to boost production to 1 million standard cubic meters (mscmd) per day over the next three years. An industry official mentioned that this significant investment is part of RIL’s strategy to reverse the production drop.

CBM, a type of natural gas found in coal seams, is extracted by drilling wells into these seams. It is commonly used as compressed natural gas for various domestic and industrial applications.

RIL owns two CBM blocks in Madhya Pradesh, covering a total area of 995 square kilometres. According to RIL’s annual report for FY24, the company has over 300 wells in operation, producing an average of 0.64 mscmd of gas during the year. This is a decrease from 0.73 mscmd in FY23 and FY22, and 1 mscmd in FY21 and FY20.

In an email response, a spokesperson for RIL stated that the company has launched a multi-lateral well (MLW) programme to increase CBM production and reserves. The initial results from the first 20 wells have been promising, showing a significant rise in production. The spokesperson added that CBM has marketing freedom and is sold through auctions, following government guidelines. RIL will continue to drill more MLW wells to further enhance CBM production from its assets.

Earlier this year, RIL conducted an online auction to sell 0.90 mscmd of gas from the Sohagpur block. State-owned GAIL (India) Ltd and city gas distributor Indraprastha Gas Ltd secured most of the gas, with the winning bid set at $11 per million British thermal units.

RIL’s subsidiary, Reliance Gas Pipeline Limited, operates a 302-km pipeline connecting Shahdol (Madhya Pradesh) to Phulpur (Uttar Pradesh), linking the CBM fields with the national gas grid. This infrastructure allows RIL to distribute CBM gas to consumers across the country.