Sumatec partner COG inks pre-sale deal to sell gas
PETALING JAYA: Sumatec Resources Bhd’s partner, CaspiOilGas LLP (COG), has inked a pre-sale gas agreement to sell gas to NIPIneftegas Consortium in Kazakhstan over 15 years.
In a filing with Bursa Malaysia, the oil and gas (O&G) outfit said COG would be selling 6.2 billion cubic metres of gas or 36.5 million barrels of oil equivalent (boe) at market price.
The NIPI-led consortium will convert the feed gas into petroleum products through a proprietary gas to liquid (GTL) technology.
Sumatec said NIPI, which has its headquarters in Aktau, has invested in a wide range of technical and commercial services for the development of onshore and offshore O&G fields.
It said the proposed capital expenditure (capex) for the gas utilisation plan, which is tied to the gas development production agreement between Sumatec and COG, will start at US$60mil (RM234mil).
The total capex for the plant over the period to bring it to full capacity will be US$360mil.
The first phase of the plant operation is expected to start in 2019.
Sumatec said the NIPI-led consortium will fund and operate the GTL plant.
“The pre-sale gas agreement allows for COG or Sumatec to take up participating equity in the GTL plant at a later date if either party chooses to opt in.
“Sumatec will receive a share of the oil/ condensates produced, as well as the fee for processing the raw gas prior to the sale/supply to NIPI,” it said.
Sumatec provides management and oversight of COG’s concession area at the RakushechnoyeO&GfieldinWestKazakhstan.
According to a statement by COG, the Rakushechnoye field has approximately 140 million boe of O&G reserves, consisting of 96.4 million boe of natural gas deposits and 43 million boe of oil/condensates. There are additional reserves which have not been certified.
“As part of the gas utilisation plan, we have identified several projects to monetise the gas deposits into further lucrative downstream product businesses.
“The project includes a proprietary technology to convert feed gas into hi-octane gasoline (RON 95 and RON 98). The final product is of high demand regionally and locally and fetches attractive prices.”
COG said NIPI was a very well-known company in the O&G industry of Kazakhstan.
“Among others, NIPI has invested in a wide range of technical and commercial services for offshore and onshore gas and gas oilfield development. NIPI has offices throughout Kazakhstan, London and Russia.”