RIL Could Generate $400 mn from CBM Operations

Reliance Industries Ltd (RIL) could generate about $400 million in new revenues if its plan to produce coal bed methane in India fructifies, says Indian news magazine Business Today.

Earlier this week, RIL said that it expects to start gas output from its Sohagpur CBM blocks in the central Indian state of Madhya Pradesh from 2015-16. The company plans to produce 3.5 million standard cubic meters per day of gas from the two Sohagpur blocks.

According to Business Today, production at these blocks was delayed as the company of Indian government differed on the issue of price. However, matter was resolved with new price regime for domestically produced gas now in place.

Confirming the $400 million revenue estimate for RIL from CBM to the magazine, Girish Shirodkar, Managing Partner of Indian chapter of the US based consultancy Strategic Decisions Group says, "It is a midway for both government and RIL's demand for gas prices. We hope the country's domestic gas production would now see an upside and CBM could be turned into a success story."

Meanwhile, industry sources tell Business Today that RIL is waiting for government orders on pricing and selection criteria for the consumers and that the company is still pushing for gas prices based on parity with the imported liquefied natural gas.

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