SSGC signs gas purchase agreements, memorandum of interest

Sui Southern Gas Co. Ltd. signed a gas purchase agreement and a preliminary gas purchase agreement Monday. It also received a memorandum of interest for the supply of gas to the Guddu thermal power station located in Pakistan's Sindh province.


KARACHI�Sui Southern Gas Co. Ltd. (SSGCL) signed a gas purchase agreement and a preliminary gas purchase agreement this week. It also received a memorandum of interest for the supply of gas to the Guddu thermal power station located in Pakistan's Sindh province.

SSGCL initialed a gas purchase agreement with Bhit gas field operator Lasmo PLC (40%); Kirther Pakistan BV, a subsidiary of the joint venture of Premier Oil PLC and Shell Pakistan BV (40%); and Oil & Gas Development Co. Ltd. (20%).

The field is in Sindh province. The agreement envisions SSGCL will purchase 270 MMcfd of gas from the field partners, who are expected to invest $268 million in the field's development. The gas will be carried by SSGC's right bank pipeline system for supply to Karachi.

A previous announcement outlined the principles of the accord (OGJ Online, July 10, 2000).

SSGCL also signed a similar principles agreement with the Southwest Miano joint venture, led by Austrian oil and gas company OMV AG, for the development of the Sawan gas field in Sindh province. The agreement is expected to be followed shortly by inclusive gas sales and gas pricing agreements.

The JV will invest approximately $160 million during the next 2 years to bring on stream 170 MMcfd of sales gas. OMV (Pakistan) expects to complete all engineering work for the 170 MMcfd gas processing facilities and all commercial arrangements by April next year.

Investment and sales revenues will be shared in the JV as follows: 19.7% OMV (Pakistan); 23.7%, British-Borneo Exploration & Production Ltd.; 7.9%, Moravske Naftove Doly; 26.2%, Pakistan Petroleum Ltd.; and 22.5%, Pakistan government holdings.

The SW-Miano JV plans to increase gas deliveries from Sawan by approximately 100 MMcfd or more as soon as more gas transmission capacity become available, said officials.

The Sawan gas field was discovered by OMV in January 1998. So far OMV (Pakistan) has ascertained recoverable gas reserves of 1.5 tcf and received verification from independent consultant DeGolyer McNaughton.

Planned first gas deliveries to SSGCL via its existing Kadanwari transmission line are anticipated late in 2002. Two further production wells will be drilled and all wells will be completed for production by that date.

A memorandum of interest was also inked for the sale of approximately 120 MMcfd of gas from Zamzama field, located 200 km northeast of Karachi, to SSGCL for onward transmission to Guddu thermal power station.

The memorandum represents a significant step in the phased commercialization of the Zamzama field, said officials, adding the sale will economically benefit the nation through the use of gas for power generation rather than the previously imported fuel oil.

The memorandum was signed by field partners BHP Petroleum Pty. Ltd., Premier Oil PLC, and Lasmo PLC, as well as by Abdullah Yousuf, Pakistan's secretary of petroleum.

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