Harnessing Indias Gas Potential- Resources & Challenges to - PowerPoint PPT Presentation

Harnessing India’s Gas Potential- Resources & Challenges to accelerate domestic Production Dr.V K Rao

RESOURCES OF NATURAL GAS The Indian Scenario CONVENTIONAL GAS RESOURCES Prognosticated : 400 TCF GIIP Established : 150 TCF Percentage Conversion : 37.5% UNCONVENTIONAL GAS RESOURCES CBM Prognosticated : 91.8 TCF GIIP Established :9.9 TCF Percentage Conversion : 10.78% Shale Gas Prognosticated :200-600TCF Possible Recoverables: 130-150 Tcf Probable Resources :1894 TCM Yet to explore & establish Gas Hydrates (mainly east coast)

Scenario of Natural Gas Resources vis-à-vis production trends ( In TCF) Current Major Prognosticated GIP Conv.Factor Production Discovery Established % MMSCMD Areas East Coast Offshore, West Coast offshore Conventional 92 400 150 37.5 K-G Basin, Assam-Arakan region Unconventional ** Raniganj Jharia CBM 0.77 92 10 10.86 Sohagpur Gondwana Cambay Basin Shale Gas NIL 600 68 11.3 K-G Basin TOTAL 1092 228 ** Gas Hydrate Resources are prognosticated around 1894TCM

Domestic Natural Gas Production Scenario over the Years Production ( MMSCMD ) 160 141 140 Projected 128 127 126 120 120 111 101 100 95 94 94 93 90 84 80 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Stagnant Domestic Production?? • Despite having a substantial Resource potential, the Discoveries have not kept pace in upgradation of prognosticated to Established in Place • Lack of infrastructure and delayed implementation aspects have also hindered in exploitation of CBM gas in Eastern part of India • Delayed development & monetisation of Marginal fields • Gas pricing policy and other Policy issues

Trajectory of Demand and Supply 800 746 714 700 684 654 625 600 598 571 544 MMSCMD 516 500 490 455 438 409 400 Demand MMSCMD 378 320 300 289 Imports MMSCMD 265 244 244 244 244 244 244 244 244 242 230 223 218 218 218 218 217 211 205 204 200 198 193 Domestic Prodn: 187 182 176 171 166 161 MMSCMD 157 143 123 120 111 100 101 102 85 64 45 0 Source: Vision Document PNGRB 2013

Source: ICFI

(CBM & SHALE GAS Journey) NOCs to explore Shale Gas in their Nominated blocks

CBM- nascent stages • A total 33 Blocks are awarded in 4 Bid Rounds • Total CBM area covered 18,540 sq kms • Prognosticated Resources 91.8 tcf • Only 9.9 tcf inplace is established • Commercial production of 0.77 MMSCMD only is achieved till date • Projected Production of 4.0 MMSCMD by End of 12 th Plan

Established GIIP in CBM Blocks 1.92 Commercial production yet to start from Sohagpur Blocks

Scope of Domestic CBM production improvisation Prodn: capacity S No CBM Block Operator Established Gas in Current Production per When fully Place day developed (TCF) (MMSCMD) 1 Raniganj (S) GEECL 1.92 0.42MMm3/d 1.96 2 Raniganj(E) ESSAR 2.15 80,000M3/Day 3.0 3 Jharia ONGC 0.52 15000-20000M3/day 1.0 4 Sohagpur(w) RIL 1.96 0.25 (MMm3) 2.5 (On Trial production 5 Sohagpur (E) RIL 1.69 2.0 Only) 6 Raniganj(N) ONGC 0.26 7 Bokaro ONGC 1.06 Delayed Development 8 North Karanpura ONGC 0.34 ONGC/IOC/Deep ? TOTAL 9.90 0.77 MMm3/Day 10.46

Potential Shale Gas Basins 1. Cambay Basin 2. Gondwana Basin 3. Assam-Arakan Basin 4. Krishna-Godavari Basin 5. Cauvery Basin 6. Vindhyan Basin 7. Bengal Basin 8. Rajasthan Basin 9. Ganga Basin

Gondwana Basins • Lower Permian to Triassic age Gondwana sediments consisting of fluviatile to Lacustrine deposits of sandstones, shales and coal measures • Resource play is Barren Measure shales TOC : 4-10% T max : 440-480 VRo : 1-1.2% Kerogen : Type III

ONGC Shale Gas Find in Gondwana Basin ONGC created an exploration • landmark when gas flowed out from the Barren Measure shale at a depth of around 1,700 meters, in its first R&D well RNSG-1 near Durgapur in Gondwana Basin The Barren Measure Shales are • 858 m thick in the well drilled Based on testing results and • laboratory investigations, Schlumberger has estimated GIIP of 48 Tcf

GIP Estimated: 20 Tcf Source: ONGC

Characteristics of Shale Units in potential Basins Basin Cambay Krishna Cauvery Assam- Gondwana Vindhyan Godavari Arakan Parameters TOC (%) 1.5-4.0 1.4-5.3 0.31-4.76 0.64-1.00 4.0-10.0 0.40-6.04 VRo(%) 0.75- 0.9-1.3 0.65-1.20 0.57-1.94 0.40-1.20 No Data 1.20 Thickness(M) 500- 300-1500 300-750 400-1000 500-1000 >350 1200 Kerogen Type II & III II & III II & III II & III III II&III Gas 231 143 143 120 123 No Data Concentartion Bcf/sq mile ** Depth (M) 1200- >2000 2000-3000 >2500 >2000 >1800 2000 Prognosticated 217 280 80 55 85 Not Resources(Tcf) estimated ** Source: EIA Report

Projected Domestic Gas Supply MMSCMD

Likely accretions Domestic suply has been constrained driven by low production from K G Basin Limited accretions are likely to occur . Most of additional supply is expected from Eastern Offshore Basins • -K-G Basin(ONGC, GSPC,D-6 satellite fields) -Mahanadi Basin Western Offshore Fields • - C Series, PMT and newly discovered fields Assam-Arakan Basin,Rajasthan onland • CBM & Shale Gas • Development and Monetisation of Marginal fields •

Source: Modified after IFCI

Challenges to improve Domestic Production Technical Policy imperatives (Revised) Although initiated as Pilot Marketing & pricing freedom • • Project, Shale Gas Exploration for oil & gas produced by the may be accelerated to harness developer will definitely add and produce shale gas some adrenalin to the Adoptation of innovative • stagnating upstream business technological advancements to increase Production & production (KG onland Frac job is a case in Replacement of PSC regime by • point) Revenue sharing model The prospectivity of CBM areas • Under single licence-ALL types requires a Re-Look in the context • of anticipated CBM Gas of hydrocarbons can be production explored and developed The East coast Deep Water areas • Open Acreage Licensing Policy • offer future gas supply

Acceleration of Exploratory Efforts

Comparison of Draft Revenue Sharing Model Licensing Policy vis-à-vis NELP Revenue Sharing Model Licensing Policy Existing Policy Exploration & exploitation of ALL Exploration & exploitation of • • types of reservoirs-both Conventional Conventional reservoirs only & Unconventional Controversy on Tax holiday for gas • 7 year Tax holiday for onland, • blocks (Mineral oil) shallow water blocks ? Royalty @ 10% for Gas and 12.5% • 10 year tax holiday for Deep water • for oil blocks of >1500m water Depth.? Application of Gas utilisation No Royalty for offshore blocks • • policy for Gas discoveries Price of deep sea gas would be based • (pricing, allocation & prioritisation on weighted average of imported coal,LNG &naphtha etc)

Comparison of Draft Revenue Sharing Model Licensing Policy vis-à-vis NELP Revenue Sharing Model Licensing Policy Existing Policy (NELP) 100% Cost recovery admissable No cost recovery provision • • Production sharing Contract (PSC) Production Linked payment regime • • (PLP) for different tranches Declaration of Commerciality • DOC not required However PLP to be • (DOC) to be approved applicable from Day 1 of production FDP requires to be approved by • Although no FDP to be approved, but • Govt. prod.profiles & Recoverable MC constituted DGH/MoPNG components to be defined. • and Consortium members MC would consist of Officials from • MOEF, MOPNG, Defence, Finance, Law and Coal Ministry alongwith Consortium members

Open Acreage Licensing Policy (OALP) • Companies may submit EOI for the areas of their choice after study of G & G Data of the area • It is understood that DGH has carved out about 9300 sectors in the sedimentary basinal areas on 10’ by 10’ grid pattern to put for OALP • DGH will study and validate the EOI submitted by the Company for the area and then carve out the Licensing Block. • Subsequently ,interested Parties may submit Bids for that area expressing their commitments and offer • This OALP process would be made available round the year

Concluding Remarks  The resource potential of Natural gas in India is estimated to be 400TCf for conventional reservoirs and additional 692 Tcf for unconventional sources. This is besides the huge potential of Gas Hydrates in our east & west coast basins  Despite of having substantial potential,upgradations and discoveries have not paced up, which would have helped to improvise domestic production  Most likely areas to improve accretions are East Coast Deep Waters(KG D 6 satellites,UD-1 & Mahanadi ) Rajasthan Basin , Assam-Arakan Basin ,Shale Gas and CBM prospective locales  Policy and regulatory regimes to explore our own conventional & unconventional resources need to be re-looked and re-vitalised to reduce our dependence on imports .The upcoming Revenue Sharing Model policy with inherent incentives and OALP could be a right step in this direction.