Po Valley Energy marks maiden production with gas plant inauguration

Australia's largest investor in Italy -- resource focused Po Valley Energy -- has marked its maiden production of 1 mm cm of gas with a formal plant inauguration ceremony led by Australia's Ambassador to Italy, Ms Amanda Vanstone.
Po Valley's new 100 %-owned Castello gas plant east of Milan is currently outputting at 50,000 cm of gas per day. This volume will be incrementally increased to around 70,000 cm over the next two months as the plant moves to post commissioning operations.

"The 1 mm cm maiden production milestone, and the strengthening production profile going forward for full year 2010, are now welcome reward for a vision we set in place almost five years ago," Po Valley's Chief Executive Officer, Mr Michael Masterman, said.
"The inauguration of the Castello plant represents the first new hydrocarbon production plant in northern Italy's Po Valley region since the end in 1998 of the country's energy monopoly by ENI-AGIP and the liberalisation of the Italian gas market," Mr Masterman said. "We are now strongly positioned to add to our production, appraisal and development schedule in northern Italy with our second production field -- the also wholly owned Sillaro field east of Bologna - which is on track to commence commissioning from mid February."

The additional flows from Sillaro are expected to double the saleable gas volumes for the new Australian producer, which operates in Italy through its subsidiary, Northsun Italia. The Castello plant commenced production early in December last year, marking a successful four year transition to a producing asset from the drilling of the first well, Vitalba-1d -- in 2005. The high quality natural gas output from the Castello field is sourced from hydrocarbon structures at depths of around 1,500 metres.
"Po Valley is proud to be a pioneer in delivering new sources of secure domestic supplies to the Italian gas market -- which is still largely dependent on imported gas -- and becoming a new actor in Italy's production of national energy resources," Mr Masterman said.

Castello
Castello, east of Milan, is the company's first gas field in commercial production. The field was drilled in 2005 at a location updip from the former ENI Agnadello well, which produced 13 bn cf of gas over a period of five years in the 1980s. The Castello gas field was successfully tested by Po Valley in Vitalba #1 well over two gas bearing levels early in 2006. Flow rate testing of the two levels, San A1 and San A2, produced flows of 2.8 mm cfpd on a 1/4 inch choke.
The field will be a single well development connected to the grid some 800 metres away. Environmental approval was granted during March 2008 and the company was awarded a 20-year production concession in November 2008.

The surface gas treatment plant contract was awarded to Semat of Italy and is 100 % complete, on schedule and within budget and installation approval has been granted at the end of June.
Semat completed site activities and civil and mechanical works: commissioning period commenced in October and the surface gas production plant has now been connected to the Italian pipeline grid. The company is ready to put the field into commercial production, expected for the end of November. Castello has Proven and Probable (2P) gas reserves of 6.3 bn cf.