The Kiliwani North production license operator Ndovu Resources Limited (a subsidiary of Aminex plc) has announced that initial production that started in April and the first Kiliwani North-1 (KN-1) gas was processed and entered the pipeline system connecting the Songo Songo plant with the national pipeline on 2nd June.
This follows the commissioning of the gas plant and sub-sea pipeline which commenced on 1 June 2016 while commissioning of the power generation system and other auxiliary facilities has been completed.
According to Ndovu Resources during the commissioning, gas rates are planned to ramp up to 30 mmscfd while pressuring up the plant and pipeline
Ndovu further adds that together with its partners they have invoiced for April and May gas production in accordance with the terms of the signed Gas Sales Agreement (GSA).
All gas produced during the build-up to full production rates will be paid for under the terms of the GSA signed with the sole buyer, Tanzania Petroleum Development Corporation (TPDC). Aminex will receive US$3.00 per mmbtu (approximately US$3.07 per mcf).
The gas price is not linked to any commodity price so importantly is unaffected by current commodity market conditions.
The gas delivery point is at the outlet flange of the Kiliwani North wellhead and, by selling the gas at the wellhead, the joint venture partners will not be liable for pipeline transportation and processing fees.
“We are pleased with the progress made so far at Kiliwani. The well has been performing very well and commissioning is so far on schedule. The Company continues to focus on delivering production growth through Kiliwani and driving its appraisal and eventual development programme at Ruvuma,” commented Aminex CEO Jay Bhattacherjee.
Initial production rates remain carefully managed to allow for testing and commissioning of the gas processing plant and pipeline, while recording critical pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the reservoir.
Together with TPDC the operator says it plans to conduct a well test during the production build up to determine the optimal flow rate which will become the Commercial Production Rate under the GSA with Ndovu intending to flow gas at that rate for as long as possible prior to a natural decline in production.
Based on the initial pressure response from the KN-1 well it is expected that the well will be operated at approximately 30 mmcfd gross (4,500 barrels of oil equivalent per day).
“I visited the Songo Songo gas plant last week and was very impressed with the quality of the facilities and the progress being made with commissioning. I am encouraged by the work that has been undertaken by TDPC and Aminex, and expect that we will now reach the expected offtake rate in the next few months,” Neil Ritson, Solo’s Chairman commented.
KN-1 has booked contingent resources (2C) of 28 billion cubic feet gross. Aminex expects to book reserves for Kiliwani North later this year