Reliance Industries Chairman Mukesh Ambani is planning to invest over Rs 1,000 crore in its Coal Bed Methane (CBM) block located in Sohagpur, Madhya Pradesh. The company's goal is to increase CBM gas production in these areas. CBM is a type of natural gas found trapped in coal seams, which is extracted by drilling wells into the coal layers. This gas is commonly used for various domestic and industrial purposes in the form of Compressed Natural Gas (CNG).
An official familiar with the matter stated that Reliance is currently witnessing a decline in CBM production. The company aims to boost production to 1 million standard cubic meters per day (MSCMD) over the next three years, which will require drilling new wells. To achieve this, the company is planning to make a significant investment. Reliance currently owns two CBM blocks in Madhya Pradesh, spanning 995 square kilometers.
Gas production from these wells has been steadily declining year by year. According to Reliance's annual report for the financial year 2024, gas is currently being produced from over 300 wells in this area. The average production during the year stood at 0.64 MSCMD. In comparison, the average production from these blocks was 0.73 MSCMD in the financial years 2023 and 2022, and 1 MSCMD in the financial years 2021 and 2020.
A spokesperson from Reliance mentioned that to enhance CBM production and reserves, the company has launched a Multilateral Well (MLW) program. The initial performance of the first 20 wells has been promising, showing a significant increase in production. The spokesperson added that CBM has the freedom to be marketed and is sold as per the auction guidelines issued by the government. The company plans to continue drilling new wells to further increase CBM production and reserves.
Reliance sells this gas to several companies, which then distribute it as per their requirements. In February this year, Reliance held an online auction for the gas produced from the Sohagpur block. The auction attracted buyers such as GAIL (India) and Indraprastha Gas Limited.
