Ntorya Gas Field Granted Development License

ARA Petroleum of Qatar and Aminex (LON: AEX) of the UK recently announced that the Ministry of Energy in Tanzania has granted a 25-year development license for the Ntorya gas discovery area.

The development license was received by the operator of the Ruvuma Joint Venture (JV), ARA Petroleum Tanzania Limited (APT), on 23rd May 2024.

The Ntorya development license area lies adjacent to a region containing supergiant, world-class LNG projects, which extend from offshore Tanzania into Mozambique waters to the south.

APT estimates the Ntorya area to contain a matured, unaudited Contingent Resource of 3.45 trillion cubic feet (tcf) of Gas Initially In Place (GIIP), with a mean unrisked GIIP potential of 16.4 tcf and a risked mean potential of 6.9 tcf for the wider Ruvuma JV area.

The development license divides the Mtwara Exploration License area into nine blocks: five blocks containing the Ntorya discovery and four adjoining blocks. The Ruvuma JV parties are required to undertake the following work program over the four adjoining blocks:

• Conduct geological, geophysical, and geochemical studies;
• Drill one exploration well within five years of the start of production under the Development License;
• Spend a minimum of USD 10 million.
• Further discoveries in the adjoining blocks will fall under the development license.

Erhan Saygi, General Manager of ARA Petroleum Tanzania (APT), commented: “We are delighted to receive this license from the Ministry of Energy and thank all the Tanzanian agencies involved in achieving this major milestone. We are ready to launch work immediately to bring this onshore development project into production.”

Charles Santos, Executive Chairman of Aminex commented: “We are delighted to receive the Development Licence from the Ministry of Energy and thank APT and all Tanzanian agencies for working together to achieve this major milestone. The Tanzanian government has clearly said it would use the country’s energy resources to eliminate energy poverty, spur growth, and improve living standards. We believe Ntorya is a vital part of this vision and the Development Licence helps turn this vision into reality. As a founding partner in Ntorya, we are proud and excited to support ARA Petroleum and the Tanzanian authorities in this crucial effort.”

The JV partners intend to produce Ntorya gas for the growing domestic gas market, helping to alleviate energy poverty and support the energy transition in Tanzania.

Earlier this year, a multi-year gas sales agreement was signed with the Tanzania Petroleum Development Corporation (TPDC), for the sale of gas from the Ntorya location.

The Daily Contract Quantity (“DCQ”) for the first Contract Year is 40 MMscfd. The DCQ for subsequent years may be increased upon the agreement of the parties. The Maximum Daily Quantity (“MDQ”) to be sold under the GSA will be 120% of the DCQ, being 48 MMscfd for the first Contract Year.

In early May 2024, TPDC updated the JV partners on its progress in constructing a 35km pipeline spur from Ntorya to the Madimba gas processing plant. TPDC told Aminex and APT that it has acquired the land required for the pipeline, and has completed all front-end engineering and design works.

TPDC is now in the process of completing the necessary Environmental Impact Study and expects to issue a tender for the construction of the pipeline in July 2024.