Sri Lanka’s LNG reserves to be explored by 2021
According to the “Petroleum Exploration Development Plan” released by the Petroleum Resources Development Secretariat (PRDS) Sri Lanka intends to commercialise the natural gas discoveries in one of the gas blocks in the Mannar Basin by 2021.
“The economic analysis of these two discoveries indicates a very competitive gas price and about 11 oil and gas companies including few major exploration companies have already expressed their interest for this block and the Government expects to license this block by early 2018. The government has opened the Block M2, which contains two natural gas and condensate discoveries namely Dorado and Barracuda shows a combined potential for reservoir capacity in excess of 2 TCF (Trillion Cubic feet) of natural gas and 10 million BBL (barrels) of condensate,” the PRDS said.
It also stated that it intended to fast track exploration in Cauvery and Lanka Basins through diversified licensing methods.
“If all these exploration attempts would be successful, it is expected to initially result in the replacement of a significant component of the imported distillate with domestic gas in our power generation mix, with subsequent application in both the transport and other sectors,” the PRDS stated.
Since the Government of Sri Lanka (GoSL) is attempting to further the use of clean fuel for power generation, the “Least Cost Long-Term Generation Plan” which has been approved by the Public Utilities Commission of Sri Lanka (PUCSL), aims to establish 4800MW of Natural Gas power within 20 years.
“In addition to the discoveries that have been already made, the Mannar basin has sufficiently thick and mature sedimentary deposits that may yield high-quality oil and natural gas which would be adequate for the next sixty years.Initial studies of well data and regional studies indicate that the source rocks have the potential to generate 5 billion barrels of oil and 9 trillion cubic feet of natural gas.PRDS has already carefully mapped this risked potential that is yet to be explored and verified. The availability of local natural gas will also help insulate Sri Lanka against the fluctuations of imported oil and coal into the foreseeable future and moreover towards energy security and environmental protection,” PRDS stated.
During 2008 – 2015 a sum of USD 26 million has been spent on petroleum exploration activities for local capacity building and procurement of local goods and services by the operator of block M2 in Mannar (ex-Cairn SL 2007-01-001).Nearly 17 local suppliers transacted USD 18 million services during this period demonstrating a slow emergence of a new industry.¹
With LNG exploration becoming a possible business prospect in the country, investors who become pioneers in capitalising on this stand to enjoy huge benefits.
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