Bhandut JV to Set Up Production Facilities at India's Bhandut Gas Field
Australia’s Oilex Ltd. reported Friday it has received endorsement from the Government of India for the sale of gas from the Bhandut-3 well, which is located within the Bhandut Field in India’s Cambay Basin. This is a critical milestone for returning the field to production, supplying gas to the local market and generating positive cash flow for the Company from a previously idle asset.
Now that endorsement of the gas sales agreement has been received, the Bhandut Joint Venture will proceed to establish the appropriate production facilities for Bhandut-3. This will include a compressed natural gas (CNG) loading facility that will enable CNG “bullet” trucks to be loaded at site for transportation of the gas to end users. Bhandut-3 gas is “lean” and therefore no material condensate production is expected.
As announced Aug. 20, 2013, Bhandut-3 flowed at a maximum rate of 6.5million standard cubic feet per day (MMscf/d) through a 0.39 inch (10 millimeter) choke with a flowing tubing head pressure of 1,190 pounds per square inch absolute (psia) during an isochronal test. The test confirmed the reservoir sand has a permeability of 124milliDarcy (mD), making it a conventional reservoir. It is planned to deliver approximately 0.5-1 MMscf/d from the Bhandut-3 well. The Company anticipates the cost of the production facilities payback in 7 months from commencement of production based upon the contracted gas price.
Managing Director of Oilex, Ron Miller, said:
“We are very pleased to receive the endorsement from the Government of India to sell gas from Bhandut-3 and restart production from the field to provide gas to the local market. The contracted price was determined by a competitive bidding process and remains Commercial-in-Confidence. Oilex continues towards generating additional cash flow through increasing production from its assets in India.”
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