An independent power plant is to start up in south-central Tunisia at midyear, fed by gas from two marginal fields developed by a Canadian independent operator.
The $29 million, 27 MW plant near the port of Zarzis is 70% complete, said Centurion Energy International Inc., Calgary.
Centurion and development partner Caterpillar Power Ventures International Inc. will jointly run the plant, which will operate as Societe D'Electricite D'El Bibane.
The power plant is the first in Tunisia to be constructed under legislation that allows independent power operations to utilize natural gas from marginal gas fields, Centurion noted.
The Zarzis plant, adjacent to the El Biban field production facility, will consume more than 6 MMcfd of gas now being flared from Centurion-operated Ezzaouia and El Biban fields.
Each field will supply about 3 MMcfd initially. Production is declining from Ezzaouia and increasing from El Biban. Centurion's working interests are 73.8% in El Biban field and 31.4% in Ezzaouia field.
La Societe Tunisienne d'Electricite et du Gaz (STEG), Tunisia's national power company, will buy the power under a long-term contract.
"Including Centurion's share of project cash flow after debt service on the power plant and the agreed direct gas price of 30¢/MMBtu escalating at 1.5%/year, approximately $1.20 (US)/Mcf will be realized on gas sales," Centurion said.
Centurion and Caterpillar in mid-March closed a $20.2 million limited-recourse financing with banks in London and Tunis to fund part of power plant costs.
Centurion's equity participation in the plant constituted a qualifying investment under the Tunisian Reinvestment Reserve Tax Deferral Plan. This investment extinguished a $2.8 million tax liability due from Centurion to the Tunisian government.
Since it began operating in Tunisia in 1994, milestones by Centurion and a predecessor include the first marginal gas field independent power project in 2002; Al Manzah 2, the country's first well drilled underbalanced, in year 2000; El Biban 3 re-entry, the country's first offshore horizontal well, in 1997; and Belli 3 re-entry, the country's first onshore horizontal well, in 1995.
