Tethys Petroleum has announced that its subsidiary, Kulob Petroleum, has signed a one-year gas sales contract with Kulyabgaz to supply gas to the town of Kulob in southern Tajikistan.

According to Tethys Petroleum, the price under the contract is fixed for the period of the contract at $2.44 per thousand cubic feet and the initial contract is to supply up to 65,000 cubic meters of gas per day.

It said that initial limited gas supply commenced and the gas was being delivered through a 12km pipeline from the Khoja Sartez field on which Kulob Petroleum had commenced initial work on existing wells that it had rights to undertake the Bohktar production sharing contract signed in June 2008. Work on upgrading the gas delivery system was being considered.

Through the operator under the PSC, Tethys Services Tajikistan Limited, is also working on the Komsomolsk gas field near Dushanbe, the capital city of Tajikistan. The city has little domestic gas production and is an importer of gas with the gas being transported from Uzbekistan. It has been recently announced that Uzbekistan has increased the price of its gas to Tajikistan to USD240 per Mcm (USD6.80 per Mcf).

David Robson, CEO and president of Tethys, said: “We are delighted to have concluded this initial gas contract. It is our strategy to generate good cash flow in all focus areas, whilst moving forward with an active exploration program.”

Tethys is engaged in oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan and Tajikistan.