Solo Oil PLC (LON:SOLO) has told investors it expects the Kiliwani North gas production operation in Tanzania will reach its expected offtake rate in the next few months. Production from the Kiliwani North well began in April and remains in the ramp up phase. Based on data measured to date it is expected that it will be operated at around 30mln cubic feet of gas per day, which represents 4,500 barrels of oil equivalent per day. Under the terms of the gas sales agreement in Tanzania the gas will be priced at around US$3.07 per thousand cubic feet (it is contracted at US$3 per mln British thermal units). Solo owns a 7.175% stake in the Aminex operated project, which is estimated to host 28bn cubic feet of gas, and it is expected that company will see some US$1-1.5mln of net cash revenue per year from the asset. MORE: Aminex and Solo see first gas in Tanzania WATCH: Aminex CEO excited for production-led 2016 In a stock market statement Aminex plc (LON:AEX) highlighted that commissioning of a gas plant and a sub-sea pipeline was completed at the start of June. The first Kiliwani North gas was processed and delivered via the Songo Songo plant into the Tanzania’s national pipeline on June 2. Initial production rates are being carefully managed to enable testing and commissioning work. "I visited the Songo Songo gas plant last week and was very impressed with the quality of the facilities and the progress being made with commissioning,” said Neil Ritson, Solo Oil chairman. “I am encouraged by the work that has been undertaken by TDPC and Aminex, and expect that we will now reach the expected offtake rate in the next few months." Jay Bhattacherjee, Aminex chief executive, meanwhile, said: “We are pleased with the progress made so far at Kiliwani. “The well has been performing very well and commissioning is so far on schedule. “The company continues to focus on delivering production growth through Kiliwani and driving its appraisal and eventual development programme at Ruvuma."
Solo Oil says optimal gas production expected soon
The operation in Tanzania could produce at around 4,500 barrels oil equivalent, based on data gathered to date, and Solo reckons this ramp up will be reached in the next few months.