Canada-based Jura Energy Corporation (Jura) reported Wednesday the successful full commissioning of the surface processing facilities at its Zarghun South gas field in the Zargun South Block in Balochistan province, Pakistan and a consequent significant increase in sale gas volumes from the field.
As disclosed in Jura’s press release dated Aug. 13, “off specification” gas was being sold from the field under an interim gas sale arrangement (the Interim Arrangement) due to a delay in the commissioning of an Amine Sweetening Unit. The “off specification” gas was being sold at a 30 percent price discount.
Following full commissioning of the processing facilities, gas supplied to Sui Southern Gas Company Limited (SSGCL) now meets the specification requirements provided under the Gas Sale and Purchase Agreement with SSGCL and is no longer being sold at a 30 percent price discount for “off specification” gas.
The field is now producing approximately 17 million cuboc feet per day or MMcf/d (6.8 MMcf/d net to Jura) of sales
Approximately 80 percent of Zarghun South’s reserves are certified as “tight gas” under Pakistan’s Tight Gas (Exploration and Production) Policy, 2011. Tight gas is expected to be entitled to a price of $6.74 per MMBtu. Conventional gas will be to be sold at $2.73 per MMBtu. Accordingly, the expected monthly revenue to Jura from the Zarghun South gas field is estimated to be $715,000 (net of 12.5 percent royalty).
“Bringing Zarghun South into full scale production is a highly significant event for Jura. Zarghun South is Jura’s second-largest asset, by reserves, and is now by far our largest asset in production. The cashflows projected from the field mean that 2015 is expected to be Jura’s first ever profitable year,” commented Shahid Hameed, Jura’s CEO.
The Zarghun South lease covers an area of approximately 47.8 square miles (124 square kilometers) in the western part of the Sulaiman Fold and Thrust Belt of the Middle Indus Basin. It is strategically located near the gas demand center of the city of Quetta. Jura holds a 40 percent working interest in Zarghun South, which is operated by Mari Petroleum Company Limited.
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