BHP to Proceed with Phase-2 of Zamzama Gas Field Development

BHP & Premier have received approval to proceed with the Phase-2 development of the Zamzama gas field in Pakistan. This follows the signing of separate agreements between the Zamzama Joint Venture Partnership, the Government of Pakistan and the Sui Southern Gas Company Limited.

The Zamzama Phase-2 development, operated by BHP Billiton, is scheduled for completion in the third quarter of 2007 and will increase plant production capacity by another 50% to a total of 450 million cubic feet of gas per day. Total capital costs for the project is estimated at US$120 million (Premier share US$ 11.3 million).

The Zamzama Phase-2 development represents accelerated commercialisation of additional gas reserves confirmed as a result of successful field appraisal. The current field reserves are estimated at 2.3 trillion cubic feet of gas, making Zamzama the fourth largest gas field in Pakistan. Gas production from the Zamzama field commenced in March 2001 through an early production system. This was followed by the full field development coming on line in July 2003. Zamzama currently supplies on average 270 million cubic feet of gas per day to its customers, the Sui Southern Gas Company and Sui Northern Gas Pipelines Limited.

A new 40-kilometer pipeline will also be installed which will allow the transportation of condensate produced at the Zamzama field for direct injection into the Karachi-Multan crude oil pipeline to PARCO refinery, thereby reducing reliance on the current mode of road transport. At the completion of Phase-2 development, the condensate production from Zamzama field will reach approximately 3,000 barrels per day.

Simon Lockett, Chief Executive of Premier, said:

"This development will result in an increase in Premier's production by around 2,500 barrels of oil equivalent per day and marks a milestone in the progress of Premier's long term business in Pakistan. Gas commercialisation projects in Premier's other fields in Pakistan, Bhit, Qadirpur and Kadanwari, are being actively pursued."


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