Coal Bed Methane – Monetization Challenges in...
Transcript of Coal Bed Methane – Monetization Challenges in...
12th – 13th November, 2013,
Ranchi (Jharkhand), India
Coal Bed Methane –
Monetization Challenges in India
International workshop on:
Development of coal based nonconventional energy resources in India
• Essar Group
• Essar CBM assets
• Raniganj CBM
• Raniganj CBM success Factors
• Essar CBM IV Blocks
• CBM Technology – Challenges
• Raniganj Well behaviour
• Production challenges
• CBM Monetization challenges – India
• Conclusion
Agenda
Essar CBM expertise
Area: 1128 sq. km
Area: TL 557, IB 209
km2
Area: 339 sq. km
Area: 206 sq. kmArea: 500 sq. km
Mehsana CBM R&D
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� More than 10,000 sq. km of CBM acreage
� More than 13 TCF of resources/reserves
� Ideally placed on the learning curve of
CBM
� Showcase success in Raniganj E CBM
block where already more than 10,000
cu.m of gas is being produced and sold to
a few local customers
� More than 170 wells already drilled in
the Raniganj field and another 300 wells
are planned in the next 2 years
� A strong experienced multi-disciplinary
team of techno-commercial domain
� Technology tie ups with leading
companies including ones experienced in
CMM in US/China
Essar advantageEssar footprint
Raniganj CBM Success tracks
Field overview
Reserves/ Resources
� OGIP for the block is 4.3 Tcf .Recoverable reserve is
854 Bcf.
� Recent study in progress has shown a much higher
recoverable gas in the block.
Current status
� Exploration Phase I & II successfully completed.
Fairway is delineated for the block.
� The Block is in Development/Phase III since May’12.
� As on date, 174 wells have been drilled & 115
completed.
� 94 wells are flowing on a given day
� Presently block producing ~ 1,00000 SCMD.
Key milestones
� Approval of >600 wells exist for the block. Immediate
plan is to drill & complete 365 well and to reach
plateau production
� GGS -1 operational , GGS II & III under commissioning.
� Durgapur Industrial region is connected through Essar
pipeline network. Customers are tied-up and gas sales
commenced in Aug’10
Air Drilling Rig For CBM
PC Pumps running at test
wells
Separators installed at test
wells
CSR: Plantation at test well CSR: Plantation at test well
sitesite
Essar Gas sales customer end-
point at Graphite India Ltd.
Hydrofrac Unit
Completed GGS at site
Raniganj CBM Success tracks..pictorial
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Essar’s other four CBM Blocks
RAJMAHAL CBM
SOHAGPUR CBM
TALCHIR CBM IB VALLEY CBM
EOL = ESSAR OIL LTD.
IB Valley CBM
Talchir CBM
Status:
�All the blocks awaiting award
of the Petroleum Exploration
Licence (PEL) from respective
state governments
�Meanwhile Environmental
clearances being pursued
1. Coal Thickness
•Multiple Coal Sequence
2. Gas Content and Gas saturation
• Quite variable
3. Permeability
• Very critical & stress sensitive
4. Dewatering capability
• Isolation from pervasive aquifers
CBM Technology - Reservoir challenges
CBM – Land Availability Issues
• Unconventional resources require huge land access.
• The CBM IV blocks are also often in the vicinity of
national/reserve forests where several constraints are
there.
Raniganj CBM Block
Talcher CBM Block
CBM Technology - Completion method
Open-hole (Barefoot)e.g. Powder River (USA)
Under-reamede.g. Powder River (USA)
Surat Basin (Australia)
Cavitatione.g. San Juan (USA)
Fracture Stimulatione.g. Raniganj Block (India)
Production behaviour of a CBM well
Well BWell A
Water level (m)
Daily Gas (m3/d)
Pump Running Hrs
RPM
Daily Water (m3)
High torque
Low torque
GG/DG issue
Problem Actions taken
High Torque
� Sand cleaning procedure standardized.
� Flush by unit – under mobilization.
� Motor under procurement (50HP and
above)
Low Torque/
No water flow at
surface
� One rig using Power Tong & 5 rigs will be
procuring power Tong within 2 months.
� NTT repair kits available by early Sept’13
GG/DG tripping
� Installing harmonic filter to reduce
harmonic distortion in progress.
� Gas taping modified is in progress.
Water Treatment /
disposal
� Increase RO water handling capacity from
700m3/day to 1400 m3/day.
� Replacement of HDPE liner of the pit.
NTT failure
Strator, sand, trajectory
Fuel contamination
Production challenges & remedial measures
Pump
Marked difference observed in drilling and completion costs for vertical and horizontal wells
Source: RISC Analysis, Geof Barker, 5th annual CBM & Unconventional Gas June 2012
Worldwide CBM Well Costs
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India CBM – Monetization challenges
CBM Block-Geology & Geography:�Multiple seam scenario with different reservoir properties
�Only CBM I blocks have made good progress . In other block not much data generated so far.
�No gas evacuation infrastructure in place.
�Blocks often located in close proximity of existing built-ups, forests, etc. which makes operations very difficult.
Technical Expertise and Equipments:�Severe lack of CBM skilled manpower in the country.
�Lack of medium sized equipment's suitable for CBM (as compared to the bigger O&G counterparts)
�New and more appropriate technologies (Horizontal laterals, etc) are based all based out of India and
demands very high price. very high priced
Geopolitics:�Unconventional resources (CBM / Shale Gas) requires huge land resources (wells and surface facilities) and
land acquisition is a challenge.
�Many blocks are located in areas of militant activities jeopardizing operations.
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India CBM – Monetization challenges
Regulatory and Govt.:�Inordinate delays in obtaining of PEL and ML from respective state governments
�Delay in Environmental and Forest Clearances due to blocks.
�A single window approval process would be welcome.
�It has always been suggested to offer those blocks with a conditional pre-approved status.
�Speedy resolution of GoI of Abandoned Mine & Coal Mine Methane sector in mining leaseholds
�Final Policy on ‘Simultaneous Exploration of O&G and CBM in same vertical space’ still awaited .
Gas Pricing & Fiscal incentives:�Industry welcomes the long required decision by the GoI to implement a free gas price in the long run starting
with current slabbing up the price to USD 8.4/mmbtu.
�Faster process of gas price approval and freedom to market gas to operator instead of fixing industry sector
specific mandates.
�Provision of cost recovery also in case of CBM.
Additional potential from Mine Methane drainage
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Vertical Pre-Mining Wells
�Recovering high quality gas from the coal seam and the surrounding strata before mining operations
begin.
�Pre-mine drainage ensures that the recovered methane will not be contaminated with ventilation air
from mine working areas. 50 to over 70 percent methane
Gob Wells
�Gob wells are drilled from the surface to a point 10 to 50 feet above the target seam prior to mining.
�Initially, gob wells produce nearly pure methane.
� Essar has played a pioneering role in developing CBM in India and has a potential to
produce about 6-7 MMSCMD in the Damodar Valley coalfield alone.
� Its understanding of unconventional technology and its adequate implementation has
led to its success and its favorable economics.
� Thus CBM Monetization Challenge comprise application of best and adequate
technology and its availability. CBM plays, thus are highly capital intensive initially.
� GoI should allow simultaneous O&G and CBM from same block (e.g. Essar’s Mehsana
– Cambay block). Also fast decision on Mine Methane drainage would also securitize
the Energy security.
� Similarly Shale Gas policy is long awaited from the GoI.
Conclusion