The highlights of the approved development plan are as follows:
— P50 in-place GIIP of 328 Bscf gas and recoverable reserves of 246 Bscf
— Production facilities consisting of mainly 14 gas wells, two manifold/headers, a total of 65 kilometers (km) of 6 flow line from wells to GGS manifold, three phase test and inlet separator, gas dehydration unit, heat exchanger, CO2 removal unit, hydrocarbon dew point control unit, condensate stabilization, storage, loading and unloading facilities, gas compression unit, gas turbine unit, water treatment plant, gas flare unit, SCADA control and monitoring system
— 12 years plateau and field life of 21 years with peak production rate of 42 MMscfd
— Total project cost of up to $239.16 million, subject to annual budget approval by management committee
— Techno-economic feasibility proved with expected positive net cash present value at 10% discounting factor
— Production mining lease in respect of SGL field to be granted for an initial period of 20 years
The total capital cost share to Indus Gas in the SGL field development project is currently expected to be in the region of $150 million, to be spent over the next 12 years. Given the level of interest shown by a number of banks in this project, Indus Gas remains confident of being able to successfully put the required funds in place as per the planned time schedule.
The certification of reserves by the DGH in late 2008 enabled the gas sales arrangement with GAIL (India) Limited (GAIL) to be put in place. There is, as a result, no additional operational value at this time in obtaining a further competent persons’ report and it has been decided to defer this to when greater value can be added through the availability of additional data.
Commenting, Marc Holtzman, chairman of Indus Gas, said:
The commitment by GAIL to the installation of the gas pipeline, the signing of the sales arrangement by GAIL with a downstream customer and approval of the SGL field development plan are major steps forward for Indus Gas and also the development and supply of power in the state of Rajasthan. The arrangement will bring predictable and substantial long term revenues streams to the Company and its shareholders.
