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JV Parties Sign Gas Pipeline Agreement |
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The Smegsy Block Joint Venture parties have signed a Well Tie
In and Services Agreement with the South Australian Cooper Basin Producers (SACBP), for the
construction of a pipeline connection from the Joint Venture’s Smegsy-1 gas discovery
well to the SACBP’s pipeline system, in PEL 106. The tie-in pipeline is approximately
4.5 km in length.
Construction of the tie-in pipeline is expected to commence
shortly and be completed by the end of the year. Once completed, revenue from first gas
sales will quickly follow, the Joint Venture having announced in September 2005 that it had
also signed a Gas Sales Agreement with the SACBP.
The Well Tie In and Services
Agreement also provides for the SACBP to provide on-going maintenance of the tie-in pipeline
construction of which will be fully funded by the Joint Venture.
In what was the
first Gas Sales Agreement entered into by the SACBP for purchase of third party Cooper Basin
gas, completion of this tie-in pipeline will represent a significant step for the Joint
Venture, and for Great Artesian Oil & Gas Limited in the commercialization of any future
gas accumulations found within this portion of the Cooper Basin.
Mr Norm Zillman,
Chairman of Great Artesian Oil and Gas Limited, said: “This Well Tie-in Agreement,
coupled with our earlier Gas Sales Agreement completes the arrangements for commercializing
any further gas discoveries we make. The Joint Venture has been very pleased with the
outcome of our negotiations with the SACBP and we look forward to consolidating our
relationship through other discoveries which may be made during our active exploration
drilling program in the region”
Once the tie-in pipeline is completed an
initial phase of extended production from
Smegsy-1 will allow determination of optimal
flow rates.
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