1. Director National Benefits Petroleum Resources Development Secretariat
Prospecting And Use of NG in Sri Lanka as a Fuel For Power Generation and Other Uses
Eng. Preeni Withanage
Director National Benefits
Petroleum Resources Development Secretariat
11/20/2018

2. Projected Long Term Domestic Natural Gas Supply Scenarios

3. Mapped Risked Potential - Mannar Basin
Hydrocarbon Potential – Offshore 3 2
Mapped Risked Potential - Mannar Basin 1
Discovered Resources
Total
Total
Block M2, Mannar
Dorado – 300 BCF
Barracuda – 1.8 TCF, 10 Mbbl Oil
Mannar Basin
Gas – 9 TCF
Oil – 5 bbl
Cauvery Basin and JS Blocks to be explored
11/20/2018

4. Frequently Asked Questions
General Public
ඇත්තට ම අපේ රටේ ගෑස් තියෙනව ද?
කවද්ද අපට ගෑස් දෙන්නේ?
ඔයාලගේ තෙල්, ගෑස් වලට බාලගිරි දෝෂය ද?
ඇයි අපිටත් බැරිද ගෑස් වලින් අඩුගානේ රජයේ බස් ටිකවත් දුවන්න?
අපේ ගෑස් වලින් යූරියා හදලා පිටරටටත් දෙන්න බැරි ද?
ඇයි ගෑස් වලින් විදුලිය නිපදවලා Electric car, මොනොරේල් promote කරන්නේ නැත්තේ?
අපේ ගෑස් වල ගාන කීය ද? etc
Professionals
At what depths those reserves are found
Cant we convert our existing CGGT PP to NG
Can you compete with coal and LNG in future
Do you have any plans to export gas
Can you technically recover the quantities you have estimated
Do we have the expertise locally to face the future challenges , etc

5. Exploration Phase – ( 3 – 8 years or more)
Understand the Industry Challenges
Exploration Phase – ( 3 – 8 years or more)
High Risk, Discover HC
Appraisal Phase – (1 – 2 or more)
Reduce risk and uncertainty, Assessment of the size and commercial viability of the resource
Reserves Commercialization-
Economic viability based on market demand , policies and sales price – Enter into Gas sales agreement
Development Phase- ( 1 – 3 y or more)
High cost , Maximize early production
Production Phase – ( 10 – 30 or more)
Ensure Economic Returns

6. Exploration Challenges – M2 Block Discoveries ( 7 years, Exp cost USD 235 Million)
Dorado
Barracuda
300 BCF
1.8 TCF
315 MW – E 40% (Continues supply)
Eg : 630 MW – PF 50%
1000 MW -E 40%
(Continues supply)
Eg: MW – PF 50%
70 MMscf/d for 9 years
210 MMscf/d for 22 years
11/20/2018

7. Techinical Challengers -
Eg : Proposed Dorado Field Development Concept – USD 900 Million (2013)
Based on peak production 70MMscfd
Sub sea facilities
Onshore gas processing plant
Proposed location for onshore processing
plant about 55 km, 10” sub sea pipeline to
Norocholai
Production to start with two initial wells with
additional wells later to maintain the
production rate
Possible offtake
Three power plants currently using liquid fuel
(630 MW, 40% E, 50%PF)
About 150 km onshore pipe line to bring gas
to power plants and other consumers

8. Commercial Challenges – Key Factors affecting the commercialization
Reserve assessment – Supply potential
Global market conditions
Demand for NG
National Gas policy
Assured offtake (take or pay)
Export potentiality
Local Market - Infrastructure, benchmark for estimates
Flexible Contractual fiscal terms
Political situation
Execution challenges – ecological sensitive area

9. Projected Long Term NG induction Strategy as a Fuel/Feedstock

10. A study to identify the best way to utilized domestic NG in all sectors to gain long term economic benefits under the expected following scenarios
1. BAU - Business as Usual; present consumption and forecasts future trends using the same fossil fuels
2. NG1 - Natural Gas will be expanded into power and other sectors where it can be used, but energy demand growth will remain the same as in BAU. A low penetration rate is assumed in this scenario for industrial transport and household sectors and the CEB case for introducing natural gas in place of coal was adopted for the power sector
3. NG2 – A higher penetration rate is assumed in this scenario for the 3 sectors outlined above. For the power sector, in addition to the gas operated power plants included in Scenario NG1, the proposed coal power plant at Trincomalee will be replaced by an NG plant
4. NG3 - Optimum take-up of NG into the domestic economy over time will yield the true long-term economic benefit of the resource, and this scenario includes new industries and new power plants along with the liquefaction and export of produced surplus.

11. Projected Fuel Oil Consumption under BAU - These figures give the daily requirement of NG if the entire thermal energy requirement is to be obtained from NG combustion, replacing diesel oil, kerosene, gasoline, LPG, fuel oil, residual oil, coal and naphtha referred to as NGEq.

13. Demand for NG as a Feedstock

14. Total Demand NG1 - 6 TCF Total Demand NG2 - 10 TCF
Total supply TCF
Max Shortage TCF(NG2)
Gas Potential TCF
Total Demand NG TCF
Total Demand NG TCF
Total supply TCF

16. Economic Model – NG Pricing Mechanism
Fiscal Terms
Royalty, Cost Recovery Ceiling, Tax, Bonus, Profit Share
Who gets What
Contractor
ROI, IRR NPV
Government
Profit Share
Royalty, Bonus, Tax
NOC
Capital Cost
Daily Production
Rate
Economic Model
Price
Discount Rate
Operating Cost

17. Case Study 1 - Economic Scenario Analysis - (300 BCF) vs (2 TCF) – Year 2013

18. Benefits for the period Jul 2008 to Mar 2015 – Block M2
Exploration Expenditure
$ 25M
11% for
Local Content
LC 11%
230
235M
Petroleum Data
3D Seismic data 2400 Sqkm
Gravity magnetic data 5700 lkm
Well log and other data of 4 Exploration Wells
Other processed data of the two gas discoveries

19. Key Concerns Explore more – Increase Volumes Conduct Research
Feasibility of introducing NG to Transport
Number and types of vehicles
Order of priority
Conversion of existing fleet – feasibility and cost
Comparison between electric vs CNG , DME options
Feasibility of producing Fertilizer locally using NG
Feasibility of using NG for HH& Commerce
Cost – Benefit analysis to compare replacement of NG with other energy sources (not to play with numbers)
Maximize local participation in this industry
Flexible NG and fiscal policy to attract foreign investors
Expedite development and production - if we delay this ,we are accountable

20. Acknowledgement Sincere thanks are due to
Eng. Shavindranath Fernando for giving me this opportunity
Mr. Saliya Wickramasuriya, DG, PRDS and staff for their support, guidance and encouragement.
For you all for listening to me patiently
My Contact Details
prds.lk, Tel :