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Aminex goes into first Tanzania gas production

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Monday, April 18, 2016 

Aminex goes into first Tanzania gas production

ARUSHA, TANZANIA - Aminex PLC, has announced first gas production from its Kiliwani North gas field in Tanzania writes ELISHA MAYALLAH.

The Kiliwani North Development Licence is operated by a wholly-owned subsidiary of the company with a 55.57 percent working interest, which is expected to reduce to 51.75 percent as a result of a partial disposal announced on April 4, 2016. 

The field will provide the company with its first significant African production revenues.

According to a statement, Initial production commenced from the Kiliwani North-1 well (KN-1) on 4 April. KN-1 is tied into the regional pipeline infrastructure and will deliver gas to the new adjacent Songo Songo processing plant, ultimately serving the local power market.

Production is expected to build up to an anticipated production rate of 25-30 MMcfd (approximately 4-5,000 boed gross) over the next 90-100 days. All gas produced during the build-up to full production rates will be paid for under the terms of a recently signed Gas Sales Agreement signed by the sole buyer, Tanzania Petroleum Development Corporation (TPDC).

Aminex will receive $3/MMbtu (approximately $3.07 per Mcf) with expected net cash revenues of $10-15 million per annum. Aminex will receive all revenue in U.S. dollars and the contractual gas price of $3/MMbtu will be adjusted annually by applying an agreed United States Consumer Price Index.

The gas price is not linked to any commodity price so importantly is unaffected by current commodity market conditions. The gas delivery point is to be 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.

Initial production rates will be 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.

By Elisha Mayallah, Monday, April 18th, 2016