The production concession application covers Po Valley's flagship Sillaro gas field and has been filed with Italy's Ministry of Productive Activities
Its lodgment signals the formal start to the regulatory approval process leading to government sanctioning of first commercial gas flows for Po Valley from the field.
Po Valley drilled and successfully tested the Sillaro field over December 2005 and January this year, with the discovery of two additional gas bearing levels and flow rates on test 10 times expected levels.
The filing of the formal production concession application follows intensive reservoir studies and surface plant engineering conducted over the past three months.
Development of the Sillaro Pliocene level is planned on the basis of two production wells – the current in place Sillaro 1dir and a second Sillaro 2 to the west of Sillaro 1, to be drilled in 2006 or early 2007.
The province's medium pressure pipeline grid is just 50 meters from the Sillaro well site. However, because of the unexpectedly high flow rates encountered, a short four kilometer spur line along the existing medium pressure pipeline corridor is planned to connect Sillaro directly to the high pressure Italian National Pipeline Grid.
This will allow Po Valley to achieve higher daily production rates (expected to be in the order of over 8 million cubic feet per day) and provide access to the entire Italian market. Discussions are underway with the pipeline operator, SNAM Rete Gas, to determine if Po Valley Energy or SNAM constructs the entry point spur line.
Po Valley's Chief Executive, Mr. Michel Masterman, said today "the key reservoir and engineering planning work to put Sillaro into production is now complete. The regulatory approval process to convert the exploration license to a production concession is now formally underway and we are confident of a positive outcome."
"When approved, the Company will be able to quickly install this surface infrastructure and bring this highly economic gas field into production," Mr. Masterman said.
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