Pre-feasibility Report

Development Drilling, Construction of GGS and transportation Pipeline at onshore block AAP-ON- 94/1 ,

Hindustan Oil Exploration Company Pvt. Ltd. July 2014

Development Wells, GGS, Pipeline- AAP-ON-94/1 Block

Table of Contents 1 Introduction...... 3 1.1 Block Details...... 4 2 Proposed Project ...... 5 2.1 Project Justification...... 5 2.2 Development Drilling ...... 5 2.2.1 Infrastructure, Accessibility, Land Lease and Site Preparation...... 5 2.2.2 Drilling Program ...... 8 2.2.3 General Requirements of Drilling...... 8 2.3 Gas Gathering Station...... 10 2.4 Pipeline ...... 11 2.5 Project Investment ...... 12 3 Ecological Settings of the Area...... 13

List of Figure

Figure 1: Location Map of the Block Area...... 3 Figure-2: Schematic Layout of the GGS ...... 11

List of Table

Table-1: Distance of the Existing and Proposed Facility from WLS ...... 13

a HOEC Development Wells, GGS, Pipeline- AAP-ON-94/1 Block

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b HOEC Development Wells, GGS, Pipeline- AAP-ON-94/1 Block

1 Introduction

The block AAP-ON-94/1 (area 305 sq. km) is located in Tinsukia district of Assam,. The block lies between Latitude 27°18'54.99'' to 27°11'30.00'' North and Longitude 95°56'55.92'' to 95°20'00.00'' East. The block is bounded in the north by Digboi town and the Barajan, Tarajan and Jaipur settlements, in south by Tirap district of Arunachal Pradesh, in the east by Tirap river and in the west by Namrup and Hukanimuri settlement.

FIGURE 1: LOCATION MAP OF THE BLOCK AREA

The block AAP-ON-94/1 was first awarded for exploration to Joint Venture Consortium by the Government of (GoI). Production Sharing Contract (PSC) for Block AAP-ON-94/1 was signed on June 30th 1998. Presently, the JV Consortium of the block comprises of Hindustan Oil Exploration Company Limited (HOEC), Oil India Limited [OIL] and Indian Oil Corporation Ltd (IOCL). Hindustan Oil Exploration Company limited is the Operator and Oil India Limited is the Licensee of the block. The Participating Interest of the JV Consortium in the development phase is as follows: HOEC (26.882%), OIL (44.086%) and IOCL (29.032%). JV Consortium has acquired 2D/3D seismic data and drilled three exploratory and two appraisal wells in the block. Several sizeable prospects have been mapped and the Dirok

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wells drilled by the Consortium have confirmed the presence of multiple gas bearing sands. Based on the Dirok Discovery and subsequent drilling of appraisal wells in the block, which produced hydrocarbon from multiple sands from Girujan Formation; the Ministry of Petroleum and Natural Gas (MoPNG) has approved the Dirok discovery as commercial. Based on the Declaration of Commerciality (DoC) report, a Plan of Development (PoD) is being prepared for the field development.

1.1 BLOCK DETAILS The Block AAP-ON-94/1 is located in Assam-Arakan Basin and falls within geologically complex Schuppen Thrust Belt. It is located in Tinsukia District of the State of Assam, NE India. The nearby important towns are Duliajan (Head Quarters of Oil India Ltd) and Dibrugarh. Geologically the Block falls within the Schuppen Belt of the Assam-Arakan Basin. The Block lies south of the famous Digboi Field. Areas under reserve forest and wild life sanctuary cover northern and western parts of the Block respectively. In the central part of the block the river Dihing flows across the block from ENE to WSW. The southern part of the block is covered by uplands and hills. Rest of the area is covered by Tea Garden plantations. Opencast and underground coal mines operated by Coal India Limited are situated in the eastern part of the block AAP-ON-94/1. Dirok-1 is the discovery well in the block with number of gas bearing sands in Girujan Formation. Dirok-2 & Dirok-4 are appraisal wells with depth of 2500m TVD. The appraisal well DRK-2 was drilled on the same plinth within 40 m radius of DRK-1. Dirok-4 was drilled on southern flank of Dirok structure at a distance of 2 Km towards NE. A total of 17 gas bearing sands in Girujan Formation are identified and will be developed in development phase to produce hydrocarbon. All the existing wells will be put on production and three new wells will be drilled up to the target depth of 2500m TVD for field development. The lithology encountered by these wells mostly will be Girujan Formation.

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2 Proposed Project

Three wells were drilled in the Dirok site of the block during exploration and appraisal stage. The consortium now planned the following activities: • Existing three wells will be put on production • Three new development wells will be drilled and completed as producer wells • Setting up of Gas Gathering Station (GGS) • A gas pipeline shall be built to evacuate natural gas from GGS to Kusijan FGGS (Field Gas Gathering Station)

2.1 PROJECT JUSTIFICATION Dirok-1 is a discovery well in the block and produced gas from multiple Girujan sands, subsequently appraisal wells Dirok-2 & Dirok-4 were drilled in the block and they also produced gas from the multiple Girujan sands. Ministry of Petroleum and Natural gas (MoP&NG) has approved the Dirok Discovery as commercial for Field Development. Dirok Field on development will produce approximately 20 MMSCFD gas and 800 bbl of condensate. The gas will be marketed to various consumers like petrochemical/ fertilizers/ power plants and others small scale industries in the nearby area and condensate will be dispatched to Digboi refinery. The Dirok gas will cater the energy demand in the North East area and will also generate employment for the local people.

2.2 DEVELOPMENT DRILLING

2.2.1 Infrastructure, Accessibility, Land Lease and Site Preparation

Accessibility The proposed drill sites falls within Tinsukia district of Assam and well connected with Digboi through NH 38. Dibrugarh is the nearest airport located at distance of 80 km from Digboi which is again directly connected to the metropolis of Kolkata and Guwahati. The nearest railway station is at Margherita. The major towns in this district are Tinsukia, Digboi, Margherita, Doom Dooma & which are interlinked with each other through the NH- 37 & NH-38. The NH-37 is the main road link between the district of Tinsukia and the rest of Assam and the country. From Makum Junction the NH-37 bifurcates and continues as NH-38 to the town of Digboi. The NH-38 serves as the main connecting link of all the six drill sites and the town of Digboi. This is also the proposed route that will be used by HOEC for bringing in heavy drilling machinery and equipment. The Dirok area is connected with the state highway through Margarita- Road. And all the drill sites are well connected with internal roads of the Tea Garden.

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Land Lease The three existing drill sites and three new proposed drill sites are located in Dirok Tea Estate. About 2.0 hectares (approx) of land for each drilling will be taken on long-term lease from Tea Estate.

Site Preparation Site preparation will involve all activities required to facilitate the operation with the drilling rig and associated equipments and machineries. The existing drill sites (3 nos) have already been developed. Construction of approach road to the existing drill site would not be required. However, for three new drill sites the existing tea garden approach road will be widened u, if required new approach road will be constructed. It will be ensured that the land fill material and gravel for this purpose is obtained from government approved borrow areas and quarries. Clearance of existing vegetation (Tea bushes and shed trees) at the drill sites will be carried out after taking permission from Tea Estate and Forest Department. Once the approach road to the site is developed, the drilling site will be elevated to a required height. The top soil which primarily comprises of 150 mm loose top soil will be removed using mechanical means like dozer and saved at a nearby place for later use during site restoration. Leveling and compaction will be done with the help of graders and mechanical rollers. Earth and fill material and rubble will be required for land filling and site preparation. All such materials will be procured from government approved borrows and quarries. A backhoe will be used for all excavation and cutting activities (for construction of pits) on site. Subsequently, the proposed well site & campsite will be duly fenced using chain link and barbed wires. Disposal of drilling waste in the form of spent drilling mud and cuttings will be disposed on- site in specially designed pits provided with an impervious HDPE liner of 1-1.5 mm thickness. There will be a cuttings pit of 28m X 24m for disposal of drill cuttings and two waste pits of 17m X 12m for disposal of drilling mud and rig wash water. Platforms for drill pad and all other heavy equipment systems or machinery, cast in-situ Reinforced Cement Concrete (RCC) will be used for the construction of foundation system. The rig foundation will be of size 20m X 20m and will have an elevation 0.6 m from rest of the site. For making the foundations of main rig structure cast in-situ bored under- reamed piles of specified lengths will also be used. The elevated structures will have proper storm water drains with sufficient gradient, made of brick masonry, to take care of surface runoff water. The transport of the Rig including auxiliary equipments & Camp facilities to the site is expected to comprise around 100 truck loads. Though the rig and related equipments will be directly brought to site, spares, chemicals and other materials will be received at the staging point and will be used for intermediate storage of materials. The rig equipment will however be transported directly to the drilling site during mobilization and will be de-mobilized

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directly from the site. The materials will be intermittently supplied from warehouse to the drilling site, during the operations with some stock at the drilling site itself. Given the sensitivity of the site from the noise emission viewpoint, it has been decided that all construction activities and transportation of goods and equipments related to such activities will be restricted to the extent possible to day time. Drilling operations will be carried out using an Onshore Mobile Drilling unit. The major components of drilling unit are Hoisting system, Rotating Equipment, Circulating System, Tubular Goods, Pressure Control, Derrick and Substructure. The hoisting system consists of draw works an assembly of a rotating drum, a series of shafts, clutches, chains and gears for changing speed and for reversing. A crown block located at top of derrick. The crown block provides a means of taking the drilling line from the hoisting drum to the traveling block. The crown block is stationary and is firmly fastened to the top of the derrick. The Hook connects the Kelly or top drive (top drive is equivalent to Kelly & rotary table) with the traveling block. A Kelly drive refers to a type of well drilling device on an oil or gas drilling rig that employs a section of pipe with a polygonal (three-, four-, six-, or eight-sided) or splinted outer surface, which passes through the matching polygonal or splinted kelly bushing and rotary table. This bushing is rotated via the rotary table and thus the pipe and the attached drill string turn while the polygonal pipe is free to slide vertically in the bushing as the bit digs the well deeper. When drilling, the drill bit is attached at the end of the drill string and thus the kelly drive provides the means to turn the bit. The Kelly is the polygonal tubing and the Kelly bushing is the mechanical device that turns the Kelly when rotated by the rotary table. Together they are referred to as a Kelly drive. The upper end of the Kelly is screwed into the swivel, using a left-hand thread to preclude loosening from the right-hand torque applied below. The Kelly typically is about 10 ft (3 m) longer than the drill pipe segments, thus leaving a portion of newly drilled hole open below the bit after a new length of pipe has been added and the drill string has been lowered until the Kelly bushing engages again in the rotary table. The rotary table receives the power to drive it from an electric motor. The electric motor rotates the rotary table which passes through the Kelly bushing and the rotations are transmitted to the bit as the drilling progresses, the drill pipe in singles are added to continue the drilling process. At the end of the bit life, the drill pipes are pulled out in stands and stacked on the derrick platform. A stand normally has 3 single drill pipes. After changing the bit, the drill string is run back into the hole and further drilling is continued. This process continues till the target depth is reached. During the course of drilling, cuttings are generated due to crushing action of the bit. These cuttings are removed by flushing the well with duplex/triplex mud pumps. The mud from the pump discharge through the rotary hose connected to stationary part of the swivel, the drill string and bit nozzles. The mud coming out of the bit nozzles pushes the cuttings up hole and

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transports them to the surface through the annular space between the drill string and the bore hole. The mud not only carries away crushed rock from the bottom of the hole but it also cools the bit as it gets heated due to friction with formation while rotating. The mud also helps in balancing subsurface formation pressures and by forming a mud cake on the walls of the well diminishes the possibility of crumbling or caving of the well bore. At the surface, the mud coming out from well along with the cuttings falls in a trough, passes through the solids control equipments i.e. shale shaker, de-sander and de-silter. These equipments remove the solids of different sizes which get mixed with the mud during the course of drilling. The cleaned mud flows back to the suction tanks to be again pumped into the well. The drilling mud/fluid circulation is thus a continuous cyclic operation. The most suitable clay for mud preparation is bentonite which is capable of forming highly dispersed colloidal solutions. Various other chemicals are also used in mud preparation as per requirements dictated by the temperature/pressure conditions of the wells. The mud is continuously tested for its density, viscosity, yield point, water loss, pH value etc. to ensure that the drilling operations can be sustained without any down hole complications.

2.2.2 Drilling Program Drilling is a temporary activity which will continue for about 40-50 days (only drilling & formation evaluation) for each well in the block, but the number of days will vary based on depth and type of well. The rigs are self-contained for all routine jobs. Once the drilling operations are completed, and if sufficient indications of hydrocarbons are noticed while drilling, the well is tested by perforation in the production casing. This normally takes 7-8 days. If the well is found to be a successful hydrocarbon bearing structure, it is suspended for future development, if any.

2.2.3 General Requirements of Drilling Drilling programme requires the following common facilities:

Drilling mud Drilling of wells requires specially formulated mud which basically comprises inert earth materials like bentonite, barite in water with several additives to give mud weight, fluidity and filter cake characteristics while drilling. The drilling mud have several functions like lubrication and cooling of the drill bit, balancing subsurface formation pressure, bringing out the drill cuttings from the well bore thixotropic property to hold cuttings during non- operations, formation of thin cake to prevent liquid loss along well bore etc. Several additives are mixed into the mud system to give the required properties. Water based mud will be used to the possible extent in development drilling.

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Power Supply The power requirements at the site development and construction phase will be met by DG Sets. Although the drilling operations will be continuous, the power requirement will vary depending on the activities being carried out. It is anticipated that four diesel-engine generators, each with a capacity of 670 kW, will be sufficient for rig operations. Three generators will be used at a time and one will be kept on standby. A 134 KW generator will be made available for lighting and other emergency requirements.

Water Consumption and Supply The total water requirement for the site preparation and construction phase of the project is estimated to be about 1200 KL per well. With average time requirement for site preparation being about 60 days, it means about 20 KLD of water will be consumed on an average every day for each well. The total projected average consumption of water during the drilling phase will be about 1500 KL with a maximum of 50 KLD being utilized to run the drilling rig continuously, 24hrs a day. Water would be sourced from local surface water through vendors. Potable water requirement at site will be met through filtered bore well water and packaged drinking water.

Domestic wastewater The operating personnel in the drilling rigs will operate from drill site accommodation (DSA) in the vicinity of the location. Suitable soak pits will be available at the DSA.

Solids removal The rock cuttings and fragments of shale, sand and silt associated with the return drilling fluid during drilling which will be separated using shale shakers and other solids removal equipment like de sanders and de silters. The recovered mud will be reused while the rejected solids will be collected and discharged into the waste pit.

Drill cuttings and waste residual mud

During drilling operations, approx 450-500 cum per well of wet drill cuttings are expected to be generated from each well depending on the type of formation and target depth of well. In addition to the cuttings 15-20 cum/day of wastewater is likely to be generated during well drilling. The waste residual mud and drill cuttings which contain clay, sand etc. will be disposed into the waste pit.

Testing Testing facilities will be available at drilling rig for separation of liquid phase and burning of all hydrocarbons during testing. The test flare boom will be located at a distance from the drilling rig.

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Fuel Consumption The fuel consumed will mainly be diesel used by rig, various equipments, and vehicles operating to transport goods and supplies to the site. During the drilling phase, the consumption of diesel is estimated to be about 4.5-5 KLD. Out of this, a major part comprising about 85 % will be consumed by the rig (also including the DG sets) and about 15 % will be required for the Campsite. There will be provision for storing about 7-9 days of fuel which means storage of about 35 KL. The fuel will be provided by the drilling contractor and transported to site in tanker Lorries.

Resource & Chemical Usage Various chemicals will be used during the drilling phase, mainly for preparation of drilling mud. At the planning stage, an estimate of the potential usage for every chemical will be made and documented in Chemical Usage tracking sheet. During the operation chemical usage will be monitored and efforts will be made to reduce or conserve chemical usage as much as technically feasible.

Manpower / Employment The project will be employing considerable manpower for all the phases. The Site preparation phase of 60 days will employ on an average about 45 to 50 workmen, preferably from local settlements. The total number of personnel involved in the drilling activities is expected to be about 60 to 70. At any one time there will be 50-60 staff and security personnel on the well site thus a Camp Site will be set up to provide boarding & lodging. Rest of the staff will be housed in Digboi and will continue on 12hrs shift basis to the well-site. It must also be mentioned here, that the site development activities including the transportation of heavy equipments and machinery to site may involve the temporary shifting of some existing utilities like overhead power lines, phone lines, water pipelines which will be restored with high priority.

2.3 GAS GATHERING STATION All the development wells will be connected to Gas gathering Station (GGS), Gas gathering lines/systems will be installed as part of the project in Dirok oil/gas block for accumulation and transportation of raw natural gas directly from wellheads to GGS. Gas extracted from gas wells shall be sent to the gathering stations by controlling the gas pressure at wellheads. The pipelines from the wells to Gas Gathering Station (GGS) will be constructed conforming to international ANSI/API and also OISD standards as per best industry practice. The pipelines will be of buried construction with a minimum earth cover of 1.0 mtr. Gas that will be produced from the wells contains some amount of Condensate or Natural Gas Liquid (NGL) and sometimes small amount of saturated formation water. This entire

July 2014 10 HOEC Development Wells, GGS, Pipeline- AAP-ON-94/1 Block fluid from the wells will be transported through by a single pipeline through a manifold within the GGS to the existing facility at Kusijan. The proposed GGS will be constructed within the Dirok area. Construction of the GGS shall be carried out in the extended area of existing well site (DRK-4). Approximate 1.8 ha land is required for GGS. The schematic layout of the GGS is presented in Figure 2.

FIGURE-2: SCHEMATIC LAYOUT OF THE GGS

2.4 PIPELINE 12 inch diameter gas pipe line of approximately 25 km alongside the existing road from GGS to existing facility at Kusijan will be laid conforming to the international ANSI/API and also OISD standards as per the best industry practice. The pipe line will be buried with a minimum earth cover of 1 meter. The proposed alignment of the pipelines is as follows: • Approximately 5.7 km of pipeline from GGS to the bank side of the Burhi Dihing River will be laid along the Margherita Tea Garden road and Margarita-Deomali Road under RoW • Approximately 0.300 km of pipeline will be laid under the Burhi Dihing river bed. • After crossing the Burhi Dihing River, approximately 14 km pipeline will be laid along road side of NH-38 up to Digboi Town under the RoW.

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• From Digboi Town to Kusijan GGS, approximately 5 km will be laid along the road side of Digboi-Duliajan state high way under the RoW.

2.5 PROJECT INVESTMENT

Expected cost of the project:

Sl. Field Development Approximate Cost (USD) No. 1. Development Wells (3 new and three existing wells) 27 mmusd 2. GGS 12 mmusd 3. Pipeline (Approx 25 Km) 5 mmusd

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3 Ecological Settings of the Area

The Upper Dehing Reserved forest is famous and is also known as rain forest. The entire forest of the Dehing-Patkai region houses many endemic species and the forest are of multistoried types with five canopy layers. The first canopy is covered with luxuriant growth of Hollong, Titasopa and Borpat etc. The second canopy consists of Nahar with Sam, Mekai, Amari, Kadam, Bhomora, Barhomthuri, Bhelkor, Bogipoma and Bhola. The third canopy is mainly dominated by Morhal, Ajar, Mej, Owtenga, Bajiow etc. The fourth canopy is mainly covered by woody shrubs like Kaupat, Tora, Bogitora etc. Palms like Geruga, Tamul, Tokopat, tree ferns, cranes, woody climbers like oblonga are also common. The ground flora consists of various shrubs like Bon Moduriam, Bon posola, Dhopat tita, Digholti etc. Dehing Patkai Sanctuary has been notified with the total area of 116 sq. km., consisting of Upper Dehing (West Block) Reserved Forests, Dirok and Joyopore. The sanctuary is famous for many species such as Asian Elephant, Royal Bengal Tiger, Hoolock Gibbon, Leopard, Jungle Cat, Barking deer, Bison, Bear, Common Monkeys, Slow Loris, Flying Squirrel, Mongoose, Pangolin Great Indian Civet, Bat, Giant Bat, Birds like Winged Wood Duck, Hornbill, Kingfisher, Woodpecker, Myna, Dove, green pigeon, Barbet, Bulbul, Vulture, Kite, Hawk, Owl, varieties of cranes, Darter, Stork, Cormorant, Monitor Lizard, Python, Viper , Cobra and many more varieties of poisonous and non poisonous snakes. The proposed envelopment area falls within 10 km from the wild life sanctuary and the distance of the existing and proposed drill sites and facilities is given in Table-1.

TABLE-1: DISTANCE OF THE EXISTING AND PROPOSED FACILITY FROM WLS

Sl. Facility Location (Geographical Approximate Distance from No. Coordinates) WLS (km) 1. DRK-1 (Existing) 950 36/ 35.70//E; 270 16/ 01.4//N 0.50 2. DRK-2 (Existing) 950 36/ 34.30//E; 270 16/ 01.70//N 0.50 3. DRK-4 (Existing) 950 37/ 41.06// E; 270 15/ 45.42// N 1.6 4. DRK-5 (Proposed) 950 37/ 03.74//E; 270 16/ 12.14//N 1.1 5. DRK-6 (Proposed) 950 37/ 27.57//E; 270 16/ 13.85//N 1.5 6. DRK-7 (Proposed) 950 37/ 48.18//E; 270 16 13.85//N 2.0 7. GGS (Proposed) 950 37/ 41.06// E; 270 15/ 45.42// N 1.6

The Dehing Patkai Elephant Reserve with total area of 609.55 sq. km. and a total of 160 wild elephants. The established elephant corridors in the Digboi Forest division are described below [Source: Right of Passage: Elephant Corridor of India; WTI, 2004]. Kotha-Burhidihing: This corridor connects the Kotha Reserve Forest (Digboi Forest Division) and adjacent elephant populations of of Arunachal Pradesh with the Burhidihing Reserve Forest (Doom Dooma Forest Division) thereby maintaining the linkage with Terai R.F., Kakojan R.F. and Nalani R.F.

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Upper Dihing East-Upper Dihing West Block at Bogapani: This corridor lies between the Upper Dihing East and West block of forestland and passes through Bogapani tea estate and a few settlements. Tea gardens, heavy traffic of NH-38 and a railway line (Digboi-Tinsukia) are the major impediments for elephant movement. Upper Dihing East-Upper Dihing West Block between Golai-Pawai: This corridor facilitates elephant movement between the Upper Dihing East and West blocks. The proposed pipeline will be crossed the Upper Dihing East-Upper Dihing West Block at Bogapani Elephant Corridor. The proposed GPP is also located adjacent to this elephant corridor. The existing and proposed wells are around 9.0 km Upper Dihing East-Upper Dihing West Block at Bogapani Elephant Corridor.

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