Molopo To Supply Gas To A South African Distributor

MOLOPO HAS SIGNED A Memorandum of Understanding to supply a leading South African industrial gases company, with gas generated from its Free State Gas Field. The name of the putative purchaser of the gas was not included in the press release. Molopo merely states that the company is a major gas distributor with a presence throughout sub-Sahara Africa. Under the MOU, Molopo may supply up to 80,000 gallons per day of LNG which will be used to replace high priced imported LPG with natural gas from Molopo’s plant.

Methane is currently venting from old mineral exploration boreholes in Molopo’s Free State Gas Field. Existing production has been measured at over 1 million cubic feet/day and Molopo will seek to increase these volumes by a programme that includes well work-overs, new wells and the identification of additional gas emitting boreholes. Molopo will now undertake a full feasibility study, seek reserve certification and apply to convert its Exploration Rights into a Production Right, the company said in the release. Work to date on the Free State gas project has included: Identification of existing and previous gas emitting boreholes; Measurement of gas flow rates; Gas analysis including gas composition and origin; A 2,000 sample soilgas survey; Magnetometer traverses; Geological mapping; Well workover and new well design plans.

The soilgas information was integrated with emission data to delineate areas where gas is migrating to surface at potentially commercial rates. Three high-graded areas have been identified in the Free State that could be developed independently or as one project. Molopo’s next phase of work in the region will entail analysis of seismic and other subsurface data, interpretation of the petroleum system from gas genesis and migration to potential storage, tests to enhance recoveries from existing wells, and identification of leads and drillable prospects.

Molopo is now monitoring on a daily basis gas flows from 10 wells totalling 1 MMscf/d to provide the production history to support initial reserves certification, development planning and production license application. Monitoring under advice of the independent certifiers will continue for the next 3-4 months before the reserves certification process commences.

Molopo and its South African partner will now work together to complete a definitive formal gas sales agreement.



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