Africa-focused oil and gas company Aminex has announced the commencement of natural gas production at its Kiliwani North project, in Tanzania.

The London-based company says that initial gas production from the Kiliwani North-1 well has started and is expected to build up to between 25-million and 30-million cubic feet per day over the next 90 to 100 days. The level of production is equivalent to between 4 000 bb/d and 5 000 bb/d of oil.

The Kiliwani North onshore gasfield is close to the large Songo Songo gasfield.

“This is a significant moment for Aminex and is the culmination of a tremendous amount of hard work. “First gas at Kiliwani North marks the transition of the company from developer to producer in Africa and sets us on the path for growth as we begin to generate cash,” says CEO Jay Bhattacherjee.

He adds that the initial production from the Kiliwani North well was tied into the regional pipeline infrastructure and will deliver gas to the new adjacent Songo Songo gas processing plant, ultimately serving the local power market.

The company says that initial production rates will be managed to allow for testing and commissioning of the Songo Songo plant and associated pipelines. This will also facilitate the recording of critical pressure and flow rate measurements to determine the optimal flow rate to increase the life of the reservoir.

The Kiliwani North well is estimated to hold a gross contingent resource of 28-billion cubic feet.

Aminex, together with its partners in the project, has already negotiated and signed a gas sale agreement with Tanzania Petroleum Development Corporation (TPDC).

Under the agreement, TPDC will pay Aminex $3.0 per million British thermal units, which is equal to around $3.07 per million standard cubic feet of gas. From the sale, the company expects to generate a net cash revenue of between $10-million and $15-million each year.

AIM-listed Aminex is the main operator of the Kiliwani North licence, with a 51.75% stake, while Solo Oil holds 10%.

Other partners in the project are RAK Gas, with 23.75%, Bounty Oil & Gas, with 9.5%, and TPDC, with 5%.

Solo Oil chairperson Neil Ritson says the initial revenues will be reinvested to grow its reserves base in Tanzania, a country which has new national gas infrastructure and huge prospects for growth in the local gas market.

“Solo is delighted to see its investment in the Kiliwani North project move into production. This is a truly transformational step for the company,” he says.