Tethys Petroleum has received final governmental approval for Akkulka gas production contract - phase 2 of the Kyzyloi/Akkulka gas development. The final approval was granted by the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan, which gives Tethys' wholly owned Kazakh subsidiary TethysAralGaz (TAG) the exclusive gas production rights in the production contract area for an initial period of nine years.
Tethys said that the approval marks a milestone for the company with the initial planned gas flow rate from the production contract area being some 20 million cubic feet per day (MMcf/d) of natural gas. This is in addition to TAG’s Kyzyloi field gas production which, although currently temporarily suspended at the request of the trunkline owner Intergas Central Asia (ICA), is at approximately the same rate, giving combined Kyzyloi/Akkulka production of approximately 40 MMcf/d when both fields are fully on stream.
George Mirtskhulava, general director of TAG and head of Tethys’ Kazakh business unit, said: “We have been working very hard on obtaining this contract approval for some time now, and our negotiating team in Astana have done a great job in getting this contract approved before the end of this year.
“Once we have negotiated a suitable gas sales agreement for this gas and commenced production, we will be generating substantial cash flow from our Kazakh gas production helping, together with our Uzbek oil production, to underpin the company whilst we move forward with our other projects such as our recent oil discovery in Akkulka, and our exciting exploration portfolio in Tajikistan.”
Obtaining contract approval involved the verification of state approved C1 reserves and the approval of six state authorities – MEMR’s Committee of Geology, Ministry of Justice, Ministry of Economy and Budget Planning, Ministry of Environmental Protection, Ministry of Public Health, and the Ministry for Emergency Situations.
The initial size of the production contract area is approximately 109.5sqkm. The initial seven wells assigned to this production contract are already tied into Tethys’ existing Kyzyloi pipeline infrastructure and additional compression has already been installed and tested at Tethys’s booster compressor station on the Bukhara-Urals gas trunkline. These wells all produce almost methane gas from a depth of approximately 450 metres. As such production of Akkulka gas can commence immediately, a gas sales agreement has been signed.
Tethys is engaged in oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Uzbekistan.