Maurel & Prom inks gas sales agreement for Tanzania fields

9/15/2014

Maurel & Prom inks gas sales agreement for Tanzania fields

PARIS, France -- Maurel & Prom has reported that along with Mnazi Bay license partners Wentworth and Tanzania Petroleum Development Corporation (TPDC), it has signed a gas sales and purchase agreement with TPDC for the long-term sale of natural gas from the Mnazi Bay and Msimbati fields in southern Tanzania to the government owned and operated Mtwara to Dar es Salaam pipeline and Madimba central processing facility (Pipeline Project) currently under construction and scheduled for completion and commissioning in Q1 2015.

Pursuant to the Mnazi Bay GSA, the Mnazi Bay Partners are contracted to supply to the Pipeline Project up to a maximum 80 MMcfd of natural gas during the first eight months with the option to increase over time to a maximum 130 MMcfd of natural gas for up to 17-year supply period.

The gas will be sold and purchased at the inlet to a 16-in. pipeline connecting the Mnazi Bay gas production facility to the Madimba central processing facility.

The initial delivery is expected to begin during the period Jan. 22, 2015, and April 22, 2015, and be at a fixed price of $3.00 per MMbtu (approximately $3.07 per Mcf) escalating with U.S. CPI Industrial index.

With a long-term contract in place, the Mnazi Bay Partners will use the time before the commencement of first gas delivery to construct and commission the necessary surface infrastructure, inclusive of separation facilities and flow lines, to tie existing wells into the Pipeline Project.

Gas will be produced from the existing four wells in the Mnazi Bay and Msimbati fields and these wells are expected to be capable of producing natural gas sufficient to meet the initial 80 MMcfd delivery volumes under the Mnazi Bay GSA.

Maurel & Prom is operator and holds a 48.06% participation interest in production operations and 60.075% participation interest in exploration operations. The remaining participating interest inproduction operations are held by Wentworth with 31.94% and TPDC with 20%.

The Maurel & Prom Group entered Tanzania in July 2004 with the Bigwa-Rufiji-Mafia permit, which it operates with a 60% interest. It further strengthened its positions in 2009 by acquiring the production permit for Mnazi Bay, which it operates with a 48.06% interest, from Artumas.

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