So if these estimates are correct we would need to fork out about US$200k to bring Kiliwani North on stream for an initial net annual income of about US$460k.
This is based upon what Shore Capital had to say about the Kiliwani North development:
Despite past delays, we understand that the Tanzanian authorities are now very keen to see this project commercialised due to local gas shortages. Aminex is confident that it can achieve first gas in the second quarter of 2012. In addition to the engineering and procurement of equipment to tie Kiliwani North into existing gas processing facilities at Songo-Songo, final negotiation of a gas sales agreement is currently underway, and we now have sufficient confidence to factor Kiliwani North into our production forecasts for next year.
The KN-1 well tested in 2008 at a strong flow rate of 40mmcfd (million cubic feet per day), although we understand that existing pipeline capacity will initially limit daily production to 10mmcfd, once the well has been brought on stream. This will still give an annualised revenue contribution (net to Aminex) of US$6m, according to our forecasts, providing a long-term revenue stream that has scope to increase in the future. We estimate that it will cost Aminex circa US$2.6m to tie Kiliwani North into the existing facilities at Songo-Songo; this should be a relatively straightforward engineering project and first gas from the field will mark the beginning of commercial gas sales for Aminex in Tanzania.