Sri Lanka is looking for investors to revive exploration and development of hydrocarbon resources in the offshore Mannar Block and develop a floating LNG import terminal on the island’s west coast.

The Petroleum Resource Development Secretariat (PRDS), a unit of the Sri Lanka’s petroleum resources ministry, has floated a tender for development of the two hydrocarbon discoveries and exploration of potential prospects in the M2 Block in the Gulf of Mannar. The power and renewable energy ministry has issued another tender for development of a floating storage and regasification unit (FSRU) with a capacity of 2 million tons per annum near Colombo Port and associated infrastructure with LNG supplies.

The ministry is seeking bids for the LNG tender under the Swiss Challenge Procurement Procedure as counterproposals to the unsolicited investment proposal made by South Korea’s SK E&S Co. Ltd. to develop the integrated offshore LNG project near Colombo Port.

PRDS said the selected company must undertake the appraisal and development of gas discoveries and prospects in the M2 Block off the west coast of Sri Lanka. It is located in water depths varying from 50 m to 1,800 m (164 ft to 5,905 ft).

The “M2 block, covering approximated 3,500 sq km (2,174 sq miles), has two discoveries, Dorado 91 H/1/z and Barracuda 1G/1, and [a] number of undrilled prospects. Bidders are expected to consider both developments of the discoveries and exploration of the rest [of the] M2 block,” the tender said.

The authority claims that the volumetric analysis of the two discoveries has indicated a combined potential reservoir capacity in excess of 2 trillion cubic feet of natural gas and 10 million barrels of condensate.

The previous operator, Cairn Lanka Ltd., discovered hydrocarbons in two of the four drilled wells in the M2 concession before it exited in 2015 citing the slump in global oil and gas prices.

The first well, Dorado-91H/1z, was drilled to a total depth of 1,354 m (4,442 ft) and encountered 25 m (82 ft) of hydrocarbon in a sandstone between the depths of about 3,044 m (9,986 ft) and 3,069 m (10,067 ft). The reservoirs are predominantly gas bearing with some additional liquid hydrocarbon potential.

The Dorado is Sri Lanka’s first hydrocarbon discovery.

The second well, Barracuda-1G/1, was drilled to a total depth of 4,741 m (15,554 ft) and encountered 24 m (78 ft) of hydrocarbon-bearing Cretaceous sandstone in three zones between the depths of 4,067 m (13,343 ft) and 4,206 m (13,799 ft). This is also considered predominantly gas bearing with some additional liquid hydrocarbon potential.

The third well, CLPL-Dorado North 1-82K/1, was plugged and abandoned as a dry hole. The fourth well encountered high-quality reservoir sands, but they were water bearing. The well was plugged and abandoned.

Geophysical studies have indicated the presence of an active petroleum system in the Mannar Basin.

“The presence of multiple play types, including four-way structural closures, stratigraphic pinch-outs, rotated fault traps and deep water channel-fan systems are further positive indications for the hydrocarbon prospectivity in this frontier territory,” Cairn said before its exit.

In case of the offshore LNG project, the power ministry is seeking a developer to build a floating regasification terminal with a capacity of 2 million tons per annum in Laccadive Sea, off Colombo, and associated gas pipeline infrastructure.

The development envisages design, engineering, procurement, financing, completion, testing, ownership, financing, construction, commissioning, operation and maintenance of a standard newbuild FSRU; offshore terminal including mooring and unloading facilities; and delivery of regasified natural gas to delivery points at the Kerawalapitiya and Kelanitissa power plants.

“All bidders must propose an LNG regasification system that meet a regasification rate of 1 MTPA nominal capacity (2 MTPA peak capacity) with one installed spare regasification train,” according to the tender.

The terminal will supply regasified LNG from the FSRU to the existing power projects around Colombo, and the plants to be developed at Kerawalapitiya and Kelanitissa under a long-term general sales agreement with state-run Ceylon Electricity Board.

Sri Lanka, which doesn’t produce oil and gas and depends entirely on such imports, has set a target to develop gas fields in the M2 Block and the offshore LNG import terminal by 2023.