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Aminex and Solo say pipeline access discussions progressing over Ntorya-1

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Negotiations are on-going with the Tanzanian authorities for gas produced from the Ntorya-1 well in the Ruvuma Basin, Aminex (LON:AEX) and Solo Oil (LON:SOLO) said today.

Discussions are underway over the sale of gas into the 36 inch pipeline being constructed between Mtwara to Dar es Salaam that passes approximately 12 kilometres to the east of Ntorya-1.

Solo said that initial indications of gas prices being negotiated by other operators, and a development scenario prepared internally, indicate favourable development economics for the estimated most likely recoverable reserves.

An early production scheme may also be viable since Ntorya-1 was completed in a condition suitable for subsequent production.

Farm-out discussions are also continuing with various parties, the two companies added.

Participants in the Ruvuma PSA are: Ndovu Resources (Aminex) 75% (operator) and Solo Oil Plc 25%.

Neil Ritson, Solo’s executive director, said: "Whilst progress towards the eventual commercialisation of the Ruvuma PSA has been slightly slower than we previously envisaged we remain enthusiastic about the eventual outcome."

Aminex added that access to market has been restricted due to severe congestion in the existing pipeline system.

The installation of a new and very much larger pipeline together with associated treatment plants will resolve this.

A new 540 kilometre (km), 36" diameter pipeline will provide ample delivery capability for gas from Kiliwani North, Ntorya and probably for subsequent discoveries, it said.

It added it can directly confirm that 36" line pipe has already arrived in Tanzania from Chinese mills. A new treatment plant on Songo-Songo island will be located less than 2km from Kiliwani North.

The main pipeline will pass within 12km of the Ntorya-1 discovery well which, when ready for development, can be tied into a second new treatment plant, being constructed approximately 30km from the Ntorya area.

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