UK-based exploration and production (E&P) company Block Energy has signed a gas sales agreement with Georgia-based gas supplier and purchaser Bago.
The agreement refers to the offtake of gas produced at Block Energy’s flagship West Rustavi field in Georgia.
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Under the agreement, which runs through December 2022, Bago will purchase gas produced from the field priced at $5.24 per thousand cubic feet (mcf).
The company will also pay infrastructure installation costs to connect the gas produced from the West Rustavi field to Georgia’s gas distribution network.
Block Energy said that West Rustavi has unrisked 2C contingent gas resources of 608 billion cubic feet (bcf) in the Eocene and Cretaceous formations.
Followed by an MoU signed last October, the latest agreement was finalised after Bago’s appraisal of gas samples from West Rustavi.
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By GlobalDataSales from the field are expected to commence during the first quarter of next year.
Block Energy CEO Paul Haywood said: “We are delighted to sign this agreement with Bago, one of Georgia’s largest domestic private gas traders with ready access to extensive infrastructure capable of handling large volumes of gas.
“West Rustavi is the site of multiple historic gas discoveries, which we will test in the course of our work programme. When we have made further progress with our campaign, we look forward to providing guidance for West Rustavi oil and gas production for 2020.”
Block Energy noted that free and associated gas is currently being flared from well WR-16aZ of West Rustavi.
The company is carrying out a multi-well programme to realise the oil and gas potential of the field, which also includes side-tracking of a second well WR-38Z, up-dip and analogous to WR-16aZ, targeting the same Upper and Middle Eocene structures.
It is also conducting a 3D seismic survey to analyse West Rustavi’s subsurface to enable identification of optimal locations for future drilling purposes.
In July, Block Energy restarted production at well 16aZ.
