RUSSIA: Gazprom subsidiary offers to buy gas from Aladdin

RUSSIA: Gazprom subsidiary offers to buy gas from Aladdin
Komi Regiongas, a wholly-owned subsidiary of Gazprom, has offered to buy all gas developed by Aladdin Oil & Gas Company at the Middle Sedolskoye field in Russia. Aladdin has accepted the offer.

"A cooperation with Komi Regiongas represents another milestone for Aladdin and further strengthens our position as an operator in Russia," said Espen Glende, Chief Executive Officer of Aladdin, underlining that the preparations for commercial gas production is on track. A final agreement with Komi Regiongas will be signed as soon as possible.

Aladdin already has invited offers for equipment needed to begin producing the gas. Production and sales are expected to begin in June 2008.

The Russian gas price is USD 55-60 per 35.000 cubic feet (1000 m3), and is expected to rise this year due to a general gas price increase in Russia.

Aladdin's subsidiary, OOO Geotechnologia (GT), which made its first gas discovery on the license at the MS 1A well in May 2007, now has detected several gas-leading zones at the field. As previously announced, tests from the MS 1A well have showed an estimated production potential of about 2.1 million cubic feet, or about 375 barrels of oil equivalents, per day.

"Test results from the new zones in the gas well indicate a higher production rate than the 2.1 million cubic feet per day as shown by previous tests. We intend to complete the drilling of 3-4 wells on the gas structure by the end of 2008. We have already started the drilling of one new well and we expect similar production rates, as test rates for 1A, from future wells," Glende said.

Via: ScandinavianOil

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