Block Energy (BLOE) , the exploration and production firm focused on the Republic of Georgia, announced on Wednesday that it had entered into a gas sales agreement concerning the group’s flagship West Rustavi field.
The deal was made with Bago LLC, one of the largest private gas suppliers and purchasers in Georgia, to address the offtake of gas produced at West Rustavi.
The agreement follows an MoU announced on 5 October 2018 and was further finalised following Bago's appraisal of gas samples from the field.
Running until 31 December 2020, the agreement will see Bago purchase gas produced from the field at a price of $5.24 per MCF, with costs covered by the supplier in order to install the necessary infrastructure connecting the gas produced to Georgia's gas distribution network.
Commenting on the deal, Block Energy’s Chief Executive Officer Paul Haywood said, "We are delighted to sign this Agreement with Bago, one of Georgia's largest domestic private gas traders with ready access to extensive infrastructure capable of handling large volumes of gas.”
Currently, free and associated gas is being flared from well WR-16aZ under a temporary permit issued by the Georgian state.
Block is pursuing a multi-well programme designed to realise West Rustavi's oil and gas potential, including the sidetracking of a second well, WR-38Z, with plans to sidetrack three other wells, as well test one of the field's gas discoveries and drill a new gas well during its campaign.
Additionally, an acquired 3D seismic survey will form a critical understanding of West Rustavi's subsurface, the company explained, allowing optimal locations for future drilling to be identified.
“West Rustavi is the site of multiple historic gas discoveries, which we will test in the course of our work programme. When we have made further progress with our campaign, we look forward to providing guidance for West Rustavi oil and gas production for 2020," added Mr Haywood.
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