15th Sep 2014 09:03
LONDON (Alliance News) - Wentworth Resources Ltd Monday said it has signed a gas sales and purchase agreement with Tanzania's state oil company covering the Mnazi Bay and Msimbati fields.
The deal, signed by Wentworth with Tanzania Petroleum Development Company, covers the long-term sale of natural gas from the Mnazi Bay and Msimbati fields in southern Tanzania to the Mtwara to Dar es Salaam pipeline and Madimba central processing facility, controlled by the country's government.
The pipeline is currently under construction and is due to be completed and commissioned in the first quarter of 2015.
Under the deal, the partners on the Mnazi Bay project are contracted to supply up to 80 million cubic feet of gas per day in the first eight months, with an option to increase this to 130 million cubic feet of gas per day for up to a 17-year supply period.
Initial delivery of the gas under the agreement is expected to start in the first quarter of next year, said the company in a statement.
"The signing of the Mnazi Bay GSA is a significant advancement in the development of the gas industry and lays the foundation for the future domestic gas development in Tanzania," said Wentworth Executive Chairman Bob McBean.
"Additionally, this agreement is a major milestone in Wentworth's gas monetisation strategy to commercialise our discovered gas resources, taking us a step closer to reclassifying our resources to reserves, and is a significant value driver for the company," McBean added.
Wentworth shares were up 11.6% at 48 pence per share Monday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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