Oman based vehicle ARA Petroleum Tanzania (APT), together with its UK partner AMINEX Plc, has signed a gas sales agreement (GSA) for the sale of gas from the Ntorya field to the Tanzania Petroleum Development Corporation (TPDC).
APT, which was established in 2018 for the purpose of accelerating the development of the Ntorya accumulation, is the operator of the asset. AMINEX holds a 25% interest in the acreage that hosts the Ntorya field.
Key terms of the GSA include:
- The GSA will continue until the earlier of the expiry or termination of the Ruvuma PSA or Development Licence or the cessation of economic production from the Ntorya Gas Field;
- The Daily Contract Quantity (“DCQ”) for the first Contract Year is 40 MMscfd. The DCQ for subsequent years may be increased upon agreement of the parties. The Maximum Daily Quantity (MDQ) to be sold under the GSA will be 120% of the DCQ, being 48 MMscfd for the first Contract Year. The Tanzanian authorities have indicated their willingness to take more gas as production from the field increases and their ability to take such gas increases, with production of 140MMscfd anticipated within a few years of first gas;
- Payment may be made by the TPDC in US Dollars or Tanzanian Shillings.
With the gas in Ntorya now having an offtaker, the Tanzanian government is expected to speed up the issuance of Development Licence which will allow the award of a rig contract and enable the drilling of Chikumbi-1 and the workover of Ntorya-1. The testing of Ntorya-2 is now scheduled for mid-2024 using an in-country mobile test unit.
AMINEX reports that “despite the completion of an environmental impact assessment on the proposed pipeline to the Madimba Gas Plant and payment of all compensation to relevant landowners, there has been a delay in the construction of the pipeline”. The Madimba Gas Plant is where the Ntorya gas will be delivered for processing and onward delivery though the National Gas pipeline) The Tanzanian authorities now expect the pipeline to be completed by the end of 2024. APT is working closely with the TPDC to expedite construction as soon as possible.
AMINEX claims that the Ntorya discovery contains 1.8 Trillion Cubic Feet (1.8Tcf) of gas according to 3rd party CPR and has been proven by 2 wells both producing 20 MMSCF/d each during testing.