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Thursday, February 26, 2015
Orca Exploration Group Inc. updated its activities in respect tothe SongoSongo development.The company said with SongoSongo production declining below infrastructure capacity and markets continuing to expand, it has been developing plans to embark upon the first phase of SongoSongo development, with financing of approximately half of the $120 million estimated capital cost in the process of receiving internal approvals by the IFC.
Orca continues to develop options to move ahead with the SongoSongo field development in Tanzania. The field is currently producing at a rate of about 91 Mmcf/d, which is less than the existing Songas Ltd. infrastructure capacity of approximately 102 Mmcf/d. In order to fill the existing Songas infrastructure to capacity and provide operational redundancy, Orca is contemplating a first phase of offshore development consisting of working over two existing wells (SS-5 and SS-9) that are currently suspended, working over an existing production well (SS-7), and drilling a new offshore development well (SS-12).
The workovers, if successful, will use the existing infrastructure (platform and flow-lines). Should the workovers be deemed unfeasible or prove to be unsuccessful during the workover operation, it is expected that the wells will be either side-tracked or abandoned and new wells drilled to replace the old wells. The development program also includes the installation of a refrigeration unit at the SongoSongoprocessing plant. The company estimates that the program will launch between Q3 2015 to Q1 2016.
Additional productive capacity would be available to supply some volumes to the National Natural Gas Infrastructure Project (NNGIP) if and when it concludes a gas sales agreement (GSA) with TPDC. The company did say however that the first phase of SongoSongo development is not dependent upon concluding a GSA with TPDC, and additional gas volumes could be sold through the existing Songas infrastructure to industrial and/or power markets.
The NNGIP pipeline is approximately 98% completed and associated plants and facilities are approximately 83% complete, with commissioning expected by the end of Q2 2015.
The company also commented on the arrears from TANESCO saying that the company currently owes it $60.3 million of which $55.9 million is in arrears. Having instituted regular weekly payments in Q2 and Q3 2014, TANESCO made only one payment in Q4 2014. Since the beginning of 2015, TANESCO has made five of six weekly payments of TZsh 3.0 billion (approximately $1.7 million).
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