Initial production rates will be managed to allow for testing and commissioning of the recently completed Songo Songo gas processing plant and related pipelines, while also recording critically important pressure and flow rate measurements to determine the optimal flow rate to maximise the life of the reservoir.
The decision comes after the signing of a gas sales agreement (GSA) last month in which a gas price of US$3 per million British Thermal Units (BTUs), index-linked to the US consumer price index, was agreed.
Consultant LR Senergy's best estimate of contingent resources for Kiliwani North-1 of 28bn cubic feet was contingent on completion of the GSA, so Solo expects that reserves at Kiliwani North will be booked later this year.
"Solo is delighted that the momentum of the Kiliwani North project is being maintained after the signing of the GSA and we anticipate being able to report first gas and receipt of first revenue in the comings months," said Neil Ritson, Solo's chairman.
Meanwhile, Solo revealed that the proposed farm-out agreement between Aminex and Bowleven to farm-out acreage in Tanzania will not now go ahead, as a mutually agreeable work programme between the pair plus the Tanzania Petroleum Development Corporation
Solo had entered into a back-to-back agreement with Aminex to farm out part of the company's interest in the Ruvuma Petroleum Sharing Agreement (PSA); however, that transaction will also now be terminated by mutual agreement and Solo's interest in the Ruvuma PSA will therefore remain at 25%.
"The recent signing of the Kiliwani North GSA allows the partnership with Aminex to seek alternative ways to develop our highly prospective Ruvuma acreage. We are therefore pleased for the time being to retain our existing working interest in the Ruvuma PSA where the partnership is planning to recomplete the Ntorya-1 discovery for early production and drill the Ntorya-2 appraisal well," Ritson said.
Solo's shares were little changed on the news.