Aminex says that the Songas plant has been approved by expansion and is now pending submission of engineering plans.
Since the end of the reporting period, Aminex has been advised by the parties concerned that outstanding issues between the Tanzanian Government regulator and the regional pipeline operator, which were holding up the expansion of a gas plant at Songo-Songo Island, have now been satisfactorily resolved so that detailed engineering plans can be submitted for final approval. This will lead to facilities becoming available to transport gas from the Kiliwani North field to market in the Dar es Salaam region which will significantly increase revenues. ... During the reporting period, seismic processing, re-processing, interpretation and mapping were completed over the Nyuni PSA in Tanzania with very constructive results, tabulated later in this statement. Reported contingent resource GIIP of over 200 BCF (equivalent to roughly 30 million bbl) and prospective resource GIIP of over 2.5 TCF (equivalent to roughly 400 million bbl) on a Pmean basis are providing the platform for a development programme at the Kiliwani North gas field and helping identification of future exploration drilling targets. ... In Tanzania, two significant events will lead to further progress on the Nyuni PSA. Firstly, recent resolution of the issues which have stalled expansion of the gas treatment plant at Songo-Songo Island for the last two years will now enable the Company to move forward with development of the Kiliwani North gas field, which lies within the Nyuni PSA. Secondly, the mapping exercise completed by independent consultants ISIS during the reporting period has firmly established the further potential of the acreage and this will enable the Company to plan its future exploration drilling programme at Nyuni with a far higher level of confidence than before. The next well to be drilled at Nyuni is likely to test one of the large prospects close to Nyuni Island with a spud date in the first quarter of 2011. An application for a development licence at the Kiliwani North field will be submitted to the Tanzanian authorities in the near future. ... Tanzania - Nyuni PSA, including the Kiliwani North gas discovery
Aminex has a 50% interest in the Nyuni/East Songo-Songo PSA and has drilled three wells to date, as operator. Of these, Nyuni-1 was drilled in 2004 and intersected gas-bearing Aptian-Albian sands which are now considered to contain 233 BCF contingent resource gas in GIIP (Pmean basis) and Kiliwani North-1 (KN-1) which was drilled in 2008, testing gas at a flow rate of 40 MMcfd (equivalent to 6,600 BOPD). The Kiliwani North field is considered to contain 45 BCF contingent resources gas in place (Pmean basis) in Neocomian age sandstones. The contingent resource from the untested Aptian-Albian sands in Nyuni-1 is therefore now considered to be much larger than the contingent resource at the Kiliwani North field.
Contingent and prospective resources have been mapped and independently calculated by ISIS Petroleum Consultants, following (1) acquisition and processing of new seismic in 2009, (2) reprocessing of existing data and (3) integration of all seismic data sets and well data. Contingent resources (identified by drilling) and prospective resources (identified by seismic) together total over 2.8 TCF gas in place, equivalent to approximately 460 million bbl.
The Kiliwani North discovery well is located on the southern tip of Songo-Songo Island, 2.5 kilometres overland in a straight line from the gas treatment plant for the producing Songo-Songo gas field which delivers gas to market in Dar es Salaam via a 200 km common-user pipeline. This plant needs to be expanded in order to handle additional volumes of gas including production from KN-1, but progress has been stalled for two years pending resolution of certain issues between the Tanzanian regulator and the regional pipeline operator. However Aminex has been informed by the parties concerned that these issues have now been resolved so that detailed engineering plans can be submitted for final approval. Although no final timetable has been yet been confirmed by the pipeline operator, Aminex estimates that first gas will be delivered into the line from KN-1 in the first half of 2012 at a likely initial production rate of 20 MMcfd (equivalent to approximately 3,300 BOPD). With this gas plant expansion deadlock now resolved, a 25-year development licence application for Kiliwani North will be submitted to the Tanzanian authorities in the near future.
Further drilling is planned for 2011 at Nyuni and the next well is likely to test one of the prospects close to Nyuni Island, using a land rig which will drill directionally from an existing well site previously constructed by Aminex on the Island. New discoveries of gas could potentially be tied back to the KN-1 site which may ultimately become a gas gathering hub for the whole PSA area.
The Nyuni PSA is now in its third and final period and will expire in 2011, being the first PSA in Tanzania ever to last for its full term. The proposed 25-year Kiliwani North development licence will not be affected by the expiry of the PSA but the remaining exploration acreage cannot be further extended under Tanzanian law. However, the Tanzanian authorities have indicated their willingness to negotiate a completely new PSA at Nyuni, to become effective upon expiry of the existing one and have indicated that they will be prepared to finalise this before further exploration drilling commences.
Tanzania - West Songo-Songo PSA, coastal/offshore
Aminex participates in the West Songo-Songo PSA with a 50% interest. The operator is Key Petroleum Ltd. which holds the remaining 50%. The PSA covers 504 km and adjoins both the Nyuni PSA and the producing Songo-Songo gas field. West Songo-Songo lies within the Rufiji basin, a proven producing trend which includes the Songo-Songo gas field and Aminex‟s Kiliwani North gas field. Key Petroleum plans to reprocess existing seismic but no substantial progress has yet been made on this. A first well is due to be drilled in 2011. Despite limited progress to date, Aminex considers West Songo-Songo to be a valuable component of its Tanzanian portfolio and any gas discovery in due course could be tied into a gas hub based at Kiliwani North on Songo-Songo Island.
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