Coal Bed Methane - Fiscal Terms
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Experience & Opportunities For Methane Projects in India DirectorateDirectorate GeneralGeneral ofof HydrocarbonsHydrocarbons NewNew Delhi,Delhi, IndiaIndia PRESENTATION HIGHLIGHTS ¾ Major coal & lignite fields of India ¾ Coal & lignite resources of India ¾ CBM resources of India ¾ Market and Infrastructure ¾ Favorable geological factors for development of CBM ¾ CBM policy initiative in India ¾ Current activities in CBM exploration & production ¾ Prospects of CBM in the awarded blocks ¾ Expected production potential of CBM in India ¾ Major Forthcoming CBM Exploration Opportunities ¾ Development of CMM/ AMM ¾ Concluding Remarks COALCOAL ANDAND LIGNITELIGNITE FIELDSFIELDS OFOF INDIAINDIA && THETHE RESOURCESRESOURCES BASEBASE MAJOR COAL & LIGNITE FIELDS OF INDIA GONDWANA COALFIELDS Gondwana Coalfields n 20 Ref. Coalfield/Coal Belt Ref. Coalfield/Coal Belt a TertiaryTertiary LignitefieldsCoal // Lignite t s Lignite Fields No. No. i k a MAHANADI P C h i n a 1. Raniganj 8. Ib-valley N VALLEY Delhi e p 15 2. JhariaDAMODAR 9. Talchir BELT 19 a l VALLEY NARMADA r 3. Bokaro 10. Satpura 18 14 a BELT BELT m 5 4 2 n 4. N. Karanpura 11. Wardha PRANHITA 6 a 17 y GODAVARI 7 13 10 3 1 M 5. Singrauli 12. Godavari BELT 7 8 SON 9 Kolkata 6. SohagpurVALLEY 13. Birbhum 11 BELT Mumbai 7. Korba 14. Rajmahal 12 Bay Of Arabian Bengal TERTIARY COAL / LIGNITE FIELDS Sea Ref. Coal/Lignite Field Ref. Coal/Lignite Field Chennai NicobarNicobarNicobarNicobarNicobarNicobarNicobarNicobar No. No. 16 16 15. Assam-Meghalaya 18. Barmer-Sanchor Islands Islands Islands Islands Islands Islands Islands Islands 16. Neyveli 19. Bikaner Andaman Andaman Andaman Andaman Andaman Andaman Andaman Andaman Andaman 17. Cambay 20. Jammu & Kashmir RESOURCERESOURCE BASEBASE 50000 Area in sq.km. 40000 30000 48500 20000 35680 10000 21000 15000 0 Gondwana and Tertiary The coal Measures The coal Measures The coal measures Coal Basins at depth > 300 at depth < 300m RESOURCERESOURCE BASEBASE Total Area Covering Indian Gondwana and : 48500 sq.km. Tertiary coal basins The prognosticated coal bearing area from : 35680 sq.km. the known coalfields The area of coal bearing Barakar measures : 21000 sq.km. occurring at depth below the thick cover of younger rocks Coal bearing area spread over 44 Gondwana : 15000 sq.km. and 16 Tertiary coalfields containing economically viable coal resources of the country COAL / LIGNITE RESOURCES OF INDIA (AS ON 1.1.2005) A. COAL B. LIGNITE S. RESOURCES S. STATE RESOURCES STATE NO. (BILLION TONNES) NO. (BILLION TONNES) 1 WEST BENGAL 27.40 1 RAJASTHAN 120 2 JHARKHAND 72.36 2 GUJARAT 100 3 MADHYA PRADESH 19.23 3 TAMIL NADU 30 4 CHATTISGARH 39.97 TOTAL 250 5 MAHARASHTRA 8.54 6 ORISSA 60.98 7 ANDHRA PRADESH 16.93 8 NORTH EAST 0.91 TOTAL * 247.85 * Source GSI CBMCBM RESOURCESRESOURCES OFOF INDIAINDIA STATEWISE ESTIMATED CBM RESOURCES FOR AWARDED AND IDENTIFIED BLOCKS Sl. AREA CBM RESOURCES STATE COALFIELD./ BLOCK No. (Sq. Km.) (BCM) Raniganj East Raniganj North 1 West Bengal 1330 144 Raniganj South Birbhum Jharia Bokaro North Karanpura 2 Jharkhand 1857 322.10 North Karanpura (West) South Karanpura Rajmahal Sohagpur (East) Sohagpur (West) 3 Madhya Pradesh Satpura 3059 195.30 Sohagpur (North) Singrauli (West) Sonhat 4 Chattisgarh Tatapani-Ramkola 2195 119.90 Mand-Raigarh Contd…… STATEWISE ESTIMATED CBM RESOURCES FOR AWARDED AND IDENTIFIED BLOCKS Sl. AREA CBM RESOURCES STATE COALFIELD./ BLOCK No. (Sq. Km.) (BCM) 5 Orissa Talchir 500 35.0 6 Maharashtra Wardha 503 19.90 Godavari 7 Andhra Pradesh 926 63.65 Kothagudem (East) 8 Tamil Nadu Manargudi 739 27.7 Barmer – Sanchor - III 9 Gujarat Cambay - I 3010 224.20 Cambay – II Barmer - Sanchor - I 10 Rajasthan 2065 182.80 Barmer - Sanchor - II TOTAL 16,184 1334.55 (1.33 TCM) PROGNOSTICATEDPROGNOSTICATED CBMCBM RESOURCESRESOURCES :: 2.62.6 TCMTCM MARKETMARKET && INFRASTRUCTUREINFRASTRUCTURE Ever Expanding Market… Crude Oil (MMBBLS) Natural Gas (MMSCFD) 3000 16000 Demand 2760 Demand 13807 Production Supply 12000 11053 2000 8158 1463 8000 5332 825 1000 720 4000 4979 4979 4273 2472 450 240 248 338 0 0 2001-2002 2002-03 2011-12 2024-25 2001-2002 2006-07 2011-12 2024-25 Year Year Natural Gas Demand / Supply Projections 400 391 Supply * 350 NEC + CBM 313 300 Demand Æ 250 231 200 156 151 151 150 43 48 100 MMSCMD--- 108 108 50 70 121 0 2001-02 2006-07 2011-12 2024-25 * SUPPLY PROJECTIONS BASED ON PRESENT RESERVES ALMOST 100% INCREASE DUE TO RECENT DISCOVERIES IN PVT./J.V. SECTOR * INSTANT DEMAND FOR NATURAL GAS AVAILABLE IN THE COUNTRY Gondwana Coalfields n 20 a TertiaryTertiary LignitefieldsCoal // Lignite t s Lignite Fields i k a P C h i n a N Delhi e p 15 19 a l z COAL FIELD OF r 18 14 a INDIA 5 4 2 nm 17 6 a 13 y 7 10 3 1 M 7 8 z NATIONAL GAS 9 Kolkata 11 GRID Mumbai 12 Bay z Of z PRODUCT Arabian Bengal PIPELINES IN INDIA RefineriesSea in India Chennai 16 NicobarNicobarNicobarNicobarNicobarNicobarNicobarNicobar 16 MajorPRODUCT Airports in National Gas Grid IslandsIslandsIslandsIslandsIslandsIslandsIslandsIslands PIPELINE EXISTING India AndamanAndamanAndamanAndamanAndamanAndamanAndamanAndaman PROPOSED GEOLOGICALGEOLOGICAL FACTORSFACTORS FORFOR DEVELOPMENTDEVELOPMENT OFOF CBMCBM FAVOURABLEFAVOURABLE GEOLOGICALGEOLOGICAL FACTORSFACTORS FORFOR DEVELOPMENTDEVELOPMENT OFOF CBMCBM z THICK, LATERALLY CONTINUOUS COALS OF HIGH THERMAL MATURITY z HIGHER PERMEABILTY OF COAL z HIGH GAS CONTENT OF COAL SEAM z BASINWARD FLOW OF GROUND WATER THROUGH COALS OF HIGH RANK AND GAS CONTENT ORTHOGONALLY TOWARD NO- FLOW BOUNDARIES (REGIONAL HINGELINES, FAULT SYSTEMS, FACIES CHANGES, AND / OR DISCHARGE AREAS) z CONVENTIONAL TRAPPING ALONG THOSE BOUNDARIES TO PROVIDE ADDITIONAL GAS BEYOND THAT GENERATED DURING COLIFICATION. z SIZEABLE IN PLACE COAL RESERVES GEOLOGICAL CHARACTERISTICS OF INDIAN COALBED METHANE RESERVOIRS z HIGH RANK COALS STORE THERMOGENIC METHANE (JHARIA, BOKARO, RANIGANJ) z LIGNITES CONTAIN BIOGENIC METHANE (CAMBAY, BARMER) z HETEROGENEOUS INDIAN COALS SHOW VARIATIONS IN RESERVOIR PARAMETERS. z LITHOSTATIC STRESS DECREASES PERMEABILITY BEYOND 700M DEPTH. HOWEVER NETWORK OF FAULT IN GONDWANA RIFT BASINS INCREASES PERMEABILITY LOCALLY. z GAS CONTENT INCREASES AT DEPTH. z COAL UNDERSATURATED AT 300M DEPTH, SATURATED BEYOND 600M. COAL RANK, GAS GENERATION AND ADSORPTION THERMAL GAS GENERATION COAL RANK (ASTM) MATURITY (Ro%) & ADSORPTION BARMER, CAMBAY, LIGNITE BIOGENIC & MANNARGUADI LIGNITE GROUP C 0.4% SUB BITUMINOUS MIXED GAS BASINS A.B.C. RANIGANJ FM. 0.5% HIGH B ADSORPTION OF RANIGANJ & JHARIA I VOLATILE C 0.6% CAPACITY COALFIELDS T HIGH GROUP B U BARAKAR FM. VOLATILE B M 0.8% OF SATPURA, SOHAGPUR, I WARDHA, GODAVARI, N HIGH O VOLATILE A THERMAL SONHAT COALFIELDS GENERATION U 1.1% S BARAKAR FM. MEDIUM OF JHARIA, RANIGANJ, EAST VOLATILE R BOKARO & KARANPURA GROUP A A 1.5% COALFIELDS N LOW K VOLATILE S 2.0% SEMI ANTHRACITE 2.6% ANTHRACITE META ANTHRACITE 0 2000 6000 SCF / T CBMCBM POLICYPOLICY INITIATIVESINITIATIVES ININ INDIAINDIA CBM POLICY INITIATIVE IN INDIA z THE GOVERNMENT OF INDIA, IN ORDER TO UTILISE THE CBM POTENTIAL IN THE COUNTRY FORMULATED A CBM POLICY JULY’97 z MOP&NG BECAME ADMINISTRATIVE MINISTRY AND DGH BECAME IMPLEMENTING AGENCY FOR CBM POLICY z DGH DID COMMENDABLE WORK TO OPERATIONALISE THE CBM POLICY. ….Contd. CBM POLICY INITIATIVE IN INDIA ….Contd. z DGH IDENTIFIED BLOCKS FOR CBM EXPLORATION AFTER INTERACTION WITH THE MINISTRY OF COAL AND OTHER AGENCIES IN THE KNOWN HIGH RANK COALFIELD AREAS z BLOCKS OFFERED THROUGH GLOBAL COMPETITIVE BIDDING BY MOP&NG z FISCAL, CONTRACTUAL AND OPERATING REGIME AND MODEL CONTRACT PUT IN PLACE WITH ONE OF THE BEST TERMS z VERY LIBERAL FISCAL TERMS OFFERED TO ATTRACT INVESTORS COAL BED METHANE - FISCAL TERMS z No participating interest of the Government z No Signature Bonus z Allotment of blocks through global bidding z Provision for bidding for more than one block z 10% Ad-valorem Royalty payable to state Govt. z Additional Production Linked Payment Biddable 9 Payment on sliding scale for every 0.5 MMSCMD incremental gas production beyond 1.0 MMSCMD z Freedom to sell gas in the domestic market – determined prices z Fiscal stability provision in the Contract ….Contd. COAL BED METHANE - FISCAL TERMS z No Customs Duty on imports required for CBM operations z Arbitration provisions to be governed by the Arbitration and Conciliation Act, 1996, which is based on UNCITRAL provisions. z Nominal Commercial Bonus of US$ 0.3 Million after discovery z New Petroleum Tax Guide to facilitate investors z Corporate Income Tax payable as per Income Tax Act, 1961 z Model Contract to serve as guideline. z 7 year Tax Holiday from the date of Commencement of Commercial Production CURRENTCURRENT ACTIVITIESACTIVITIES ININ CBMCBM EXPLORATIONEXPLORATION ANDAND PRODUCTIONPRODUCTION ININ INDIAINDIA CBM EXPLORATION – ROUND-I & II z A TOTAL OF 16 BLOCKS AWARDED UNDER CBM-I & CBM-II ROUNDS OF BIDDING AND NOMINATION BASIS AS ON DATE z A TOTAL AREA OF 7810 SQ. KM. OPENED UP FOR EXPLORATION AND PRODUCTION OF CBM z THE TOTAL CBM RESOURCE IN THESE 16 BLOCKS IS ESTIMATED TO BE AROUND 820 BILLION CUBIC METRES z THE APPROXIMATE PRODUCTION OF CBM GAS ESTIMATED FROM THESE BLOCKS IS 23 MMSCMD AT PEAK PRODUCTION LEVELS DISCOVERIES & RESERVE ACCRETION BLOCKS OPERATOR / BLOCK AREA (SQ.KM.) GAS IN-PLACE CODE (TCF) Sohagpur (East) RIL 495 1.69 SP(East)-CBM-2001/I Sohagpur (West) RIL 500 1.96 SP(West)-CBM-2001/I Raniganj (East) EOL 500 1.385 RG (East)-CBM-2001/I Bokaro ONGC 95 1.2 BK-CBM-2001/I As per the committed work programme and time schedule in the contract & keeping in view the status of work progress in the awarded CBM blocks, the commercial production of CBM in the country is likely to commence by 2007-08. SIGNIFICANT CBM EXPLORATION ACTIVITIES z During the last three years more than 50 Coreholes, 15 Test Wells and 3 Pilot Wells have been drilled in the awarded blocks. z Air drilling technology employed for the first time in India for production test wells.