Aminex to Start Tanzanian Gas Output

UK-registered explorer Aminex has signed a gas sales agreement with the Tanzania Petroleum Development Corporation covering its Kiliwani North gas field output, it said January 13. The dollar-denominated take-or-pay depletion contract moves the company into its much anticipated production phase, it said in a London stock exchange statement. 

The initial gas price is $3.00/mn Btu, indexed against the US consumer price index, rather than oil, and fixed at the start of each year. The buyer has a letter of credit from the Tanzania Investment Bank for security, Aminex said. Minimum take is 85% of the annual volume.

Gas from Kiliwani North will be supplied to the recently completed Songo Songo gas processing plant.

Final well preparations are being completed and during this period output rates will be varied to optimise well life and establish commercial rates. During the testing and commissioning phase, the TPDC will be invoiced for gas produced at the end of each month but the start of commercial operations will be mutually agreed between TPDC and Aminex.

The delivery point will be at the outlet flange of the Kiliwani North wellhead. By selling the gas at the wellhead, the joint venture partners will not be responsible for pipeline transportation and processing fees.

Participants in the Kiliwani North Development Licence are: Ndovu Resources (Aminex) 55.575% (operator), RAK Gas 23.75%, Bounty Oil & Gas 9.5%, Solo Oil 6.175% and TPDC 5%. Solo Oil plc retains an option to purchase a further 6.5% stake and Bowleven may buy into Aminex’ stake under their co-operation agreement for Tanzania.

Aminex CEO Jay Bhattacherjee said the agreement was a “major milestone as the company's first commercial production in Tanzania…. With a mix of production from Kiliwani North and upcoming appraisal and development drilling in the highly prospective Ruvuma basin, we consider Aminex to be well placed for further growth."

William Powell