GAS

BHP to proceed with Phase 2 at Zamzama gas field, Pakistan

BHP Billiton yesterday announced approval for the Phase-2 development of the Zamzama gas field in Pakistan. This follows the signing of separate agreements between the Zamzama Joint Venture Partnership, the Government of Pakistan and the Sui Southern Gas Company Limited.

Gas production from the Zamzama field commenced in March 2001, through an early production system. This was followed by the Phase-1 development which came on line in July 2003.

Zamzama currently supplies an average of 270 million cubic feet of gas per day to the Sui Southern Gas Company and Sui Northern Gas Pipelines Limited.

The Zamzama Phase-2 development, scheduled for completion in the third quarter of 2007, will increase plant production capacity by 50% to a total of 450 million cubic feet of gas per day. Total capital costs for the project are estimated at US$120 million with BHP Billitons share of costs roughly US$46 million.

“The Zamzama Phase-2 development accelerates commercialisation of additional gas reserves confirmed as a result of successful field appraisal,” BHP Billiton said in a statement .

The current field reserves are estimated at 2.3 trillion cubic feet of gas. This makes Zamzama – which covers about 120 sq.km in Dadu, Sindh Province – the fourth largest gas field in Pakistan, according to BHP Billiton Group President of Energy Philip Aiken.

“The Phase-1 development of Zamzama was completed four months ahead of schedule as well as within the original budget and, since commissioning in mid-2003, the operational reliability has been excellent,” Aiken said

“After the completion of Phase-2, the Zamzama field will have the potential to supply a significant proportion of the country’s daily gas demand, reducing Pakistan’s reliance on fuel imports.”

BHP Billiton is also installing a new 40 kilometre pipeline that will transport condensate from Zamzama to the Karachi-Multan crude oil pipeline and then to the PARCO refinery, thereby reducing reliance on the current mode of road transport. At the completion of the Phase-2 development, condensate production from Zamzama will reach about 3,000 barrels per day.

Aiken said the company has an expanding and profitable portfolio in Pakistan.

BHP Billiton holds a 38.5% in Zamzama and is the operator. The other partners are: Government Holdings (Private) Ltd (25%), Premier Kufpec Exploration Ltd (18.75%) and Eni (17.755).

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