Tethys plans to begin gas selling into Kazakhstan-China in 2014

Baku, Azerbaijan, Dec. 6
By Elena Kosolapova- Trend:

Tethys Petroleum Limited, the oil and gas exploration and production company focused on Central Asia and the Caspian Region, plans to commence selling gas into the Kazakhstan-China pipeline by year-end 2014, the company reported this week.

The company intends to complete all necessary work and have all government permissions by this time. It also expects gas to achieve a significantly higher net price than the current net price of $65 per mcm.

Currently the tied in Tethys' gas wells on Kyzyloi and Akkulka can produce approximately 360 Mcm metres per day (13 MMcf per day). At the current gas price this production generates approximately $8.3 million per annum in revenue.

The future gas program has two aspects: those wells that have been previously drilled and tested that will be tied in and new shallow gas wells with up to 10 new wells planned for 2014.
Previously drilled and tested wells will be brought on stream over the next 12 months, at different stages dependent on their particular location and contract status.

The AKK14 well was drilled in 2008 and tested at 195 Mcm per day (6.9 MMcf per day) in the Tasaran horizon. This gas well has been approved and incorporated under the Akkulka Production Contract. It will be worked over and brought on production in January 2014 and is already tied into the pipeline system.

The AKK05 well was drilled in 2005 and tested at 223 Mcm per day (7.9 MMcf per day). This will be worked over in February 2014 whereupon it can be produced for 90 days test production. It is expected that it will be approved and incorporated under the Kyzyloi Production Contract by the third quarter of 2014 whereupon it can be placed on permanent production, also already being tied into the infrastructure.

The AKK15 and AKK16 wells were drilled in 2008 and tested at 195 Mcm per day (6.9 MMcf per day) and 289 Mcm per day (10.2 MMcf per day) respectively. Additional wells will be drilled in proximity to AKK15 and AKK16 next year and these pipelines will be laid and tied into the optimized infrastructure.

In addition to these tie-ins of already discovered gas accumulations, a comprehensive shallow gas drilling program will be carried out in 2014 to drill up to 10 new shallow gas wells. The initial well locations have been chosen with further targets to be identified close to the gas pipeline after the interpretation of 3D seismic data. These wells are targeting gas at 600-800 meters at the deeper, higher pressured Tasaran sand level that tested strongly on the AKK14 and AKK15 wells, as currently the production is exclusively from the shallower Kyzyloi stratigraphic level.

This program is expected to significantly increase gas production.