Tanzania Starts Gas Production from Kiliwani North gas well

Major operators in Tanzania’s Kiliwani North Development gas project, Solo Oil plc and Aminex plc, have announced that first gas production has now been achieved from the Kiliwani North gas well.

Solo in a statement said that initial gas production commenced on April 4, 2016 and is expected to be delivered to the gas to the newly built Songo Songo processing plant which is tied into the main national pipeline infrastructure to the local Tanzanian market

The commissioning of the plant and associated pipeline will proceed over the next 90-100 days and production will build up to an expected rate of 25-30 mmcfd (approximately 4,000 to 5,000 barrels of oil equivalent per day gross)

“All commissioning gas will be paid for and Solo will receive US$3.00 per mmbtu under the terms of its Gas Sales Agreement (“GSA”) with the Tanzania Petroleum Development Corporation (“TPDC”) with expected net cash generation of US$2.0-2.5 million per annum,” Solo Oil noted in a statement.

Commenting on the development, Solo Oil Chief Executive officer Neil Ritson said the company was delighted to have pushed the project to production despite the challenges

“Solo is delighted to see its investment in the Kiliwani North project move into production. This is a truly transformational step for the Company. Resulting revenues will initially be reinvested in growing our reserves base in Tanzania, a country which has new national gas infrastructure and huge prospects for growth in the local gas market,” he said.

Initial production rates will be managed to allow for testing and commissioning of the Songo Songo Island gas processing plant and associated pipelines, while also recording critical pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the KN-1 reservoir.

KN-1 is estimated to hold a gross contingent resources of 28 billion cubic feet (“bcf”). With production underway Solo expects to book gas reserves for Kiliwani North later this year, the company said.

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