NG Energy International (NGE) has announced finalisation of the plan for Phase I commercial production from the Sinu-9 oil and gas block onshore Colombia.
The Canadian oil and gas company, along with its partners CleanEnergy Resources and Desarrolladora Oleum, has reached an agreement with Colombian midstream partners Surenergy, INFRAES and Grupo Energetico de las Americas to speed up the commercial production.
NGE stated that 30 million standard cubic feet per day (mcfd) of natural gas will be delivered under a take-or-pay arrangement with INFRAES and Surenergy, and a further 10mcfd under a transport and commercialisation arrangement with INFRAES and Grupo Energetico de las Americas.
Both these arrangements have a period of ten years.
Under the Phase I commercial production at Sinu-9, 30mcfd of natural gas will be brought online in the first quarter of next year, and another 10mcfd of production will be brought online in the third quarter of 2024.
NGE said that working with local midstream construction experts gives it the chance to monetise swiftly, with less expense and reduced construction risk.
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NGE expects production from the Maria Conchita block in Colombia to expand from the current 7mcfd to 20mcfd.
By the third quarter of 2024, production of 60mcfd of gas from the Maria Conchita and Sinu-9 blocks is expected.
NGE CEO Serafino Iacono said: “Under the terms of these agreements, and with no need to drill additional wells at this time, the company will maintain a capital light strategy as our partners spend more than $100m to complete the production facilities and pipeline.
“As a company, we look forward to a production ramp from 7mcfd to 60mcfd by Q3 2024 and are motivated to continue finding opportunities to bring more natural gas to market with Phase 2 at both Sinu-9 and Maria Conchita, as we aim to meet our company goal of 200mcfd ahead of schedule.”
In an interview with Bloomberg, NGE CFO Jorge Fonseca said: “This is just the beginning. We have big potential in both blocks.”
When output reaches its maximum level, NG Energy will be meeting around 6% of the natural gas demands of Colombia.
As pipeline infrastructure is built to transport gas to market, Fonseca stated that the company hopes to increase that amount to as much as 20% in the following three to five years.