Petroceltic's African gas field 10th largest in world

Nov 16, 2009 01:00 AM

A gas discovery made by Dublin-based Petroceltic in Algeria was listed as the 10th-largest in the world so far this year in a new report from leading consultancy IHS Petroconsultants. The field is reckoned to contain about 2.5 tcf of gas, making it more than twice the size of the Corrib Gas Field off our northwest coast.
The onshore discovery at the Ain Tsila Ridge, announced in August, is also the largest this year in Africa. It is estimated that there is a 50 % chance that it contains reserves at 2.25 bn cf of gas, equivalent to a 400 mm-barrel oil field.

Drilling and testing is continuing on the discovery and its full extent will not be known until this work is completed. Petroconsultants estimates are based on the first well, AT-1, which flowed gas at almost 34 mm cfpd.
Testing of the AT-2 well, 9 km south of AT-1, will be completed before the year-end. This well logged a gas column in excess of 100 metres during drilling in October.

A recent review of the discovery by the Middle Eastern Economic Survey (MEES) locates the discovery just 80 km south of Algeria's second-largest gas field at Tin Fouye Tabankort (TFT) and 100 km west of the In Amenas field. Petroceltic is likely to connect production into the TFT pipeline network.
The company estimates that it will take up to three years from submitting a development plan to bringing the project on-stream. This relatively quick pace of development is possible because of its proximity to producing gas fields.

MEES said that Petroceltic's relationship with Sonatrach, the Algerian state energy firm which has a 25 % stake in the discovery, will be crucial to its ultimate success in developing the gas discoveries. It also said that the Petroceltic deal with Spanish utility Iberdrola may have been a sound strategic move.
Iberdrola is a substantial shareholder in Petroceltic and has a two-year option to buy a half-share of Petroceltic's 75 % stake in the discovery for EUR 37 mm. While this would cut the Dublin-based firm's stake to about 38 %, it would effectively cover any development cost incurred by Petroceltic.

The total cost of bringing the field on-stream is expected to be about EUR 670,000.
"Iberdrola is a term-buyer of Algerian LNG and has a 20 % stake in the Medgas project, due on stream later this year, through which is has agreed to buy natural gas," MEES said.

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