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Poly-GCL awards USD 313 mln bid to Chinese company to commission gas fields

The Chinese oil and gas company, Poly-GCL Petroleum Investments, has awarded a 313 million dollars bid to another Chinese company, China Oil HBP Group, to commission the Calub and Hilala natural gas fields in the Ogaden basin, it was learnt.

China Oil HBP Group, which provides integrated solutions for oil and gas resource development, has won the bid to commission the natural gas fields that will utilize the Ethiopia-Djibouti pipeline.

Poly-GCL Petroleum Investments awarded the contract last week. In a statement issued by China Oil HBP, the group said that it will undertake surface construction at the Calub and Hilala gas fields which has an estimated gas reserve of four trillion cubic feet (TCF). Under the two year contract, China Oil HBP will make the gas fields ready for production and build long-distance gas pipeline to support the project.  

According to the statement, China Oil HBP will collect and process the natural gas at the Ogaden Basin before pumping it to a Liquefied Natural Gas (LNG) plant to be built in Djibouti. Poly-GCL plans to change the gas into LNG and export it to mainly China. “The natural gas will be liquefied and exported to China and other countries,” the Chinese firm said.

Poly-GCL and the Ethiopian Ministry of Mines, Petroleum and Natural Gas agreed in January to start the pipeline construction after discovering several trillion cubic feet of natural gas.

Poly-GCL signed petroleum development agreement with the Ministry of Mines, Petroleum and Natural Gas in November 2013 that enables it to develop the Calub and Hilala gas fields. The gas fields were first discovered by an American company called Tenneco in 1972. Later in the 1980s a former Union of Soviet Socialist Republics (USSR) company, Soviet Petroleum Exploration Expedition (SPEE), confirmed the gas reserves.

Poly-GCL has drilled appraisal wells in the gas fields and discovered additional gas reserve and some amount of crude oil. The company began oil test production last June.

The Chinese oil firm recently made a new gas discovery in a locality called Dohar located between the Calub and Hilala gas fields. There is also another gas reserve in a locality called Genale discovered by Petronas, Malaysian oil and gas giant, in 2010.   

Koang Tutlam (MD), state minister of the Ministry of Mines, Petroleum and Natural Gas, told The Reporter in a previous interview that the total gas reserve is estimated at eight million TCF which Poly-GCL is trying to develop. According to Koang, Poly GCL is under preparation to build a 700km long gas pipeline that stretches all the way from the gas fields to the LNG plant at the Port of Djibouti.

The state minister said that works on the gas development project is progressing well. Poly-GCL has signed agreement on the pipeline construction with the governments of Ethiopia and Djibouti. “Construction of the pipeline is expected to commence next month and will be completed after two years two years,” he added.     

The total cost of the gas development project is estimated at four billion dollars. According to Dr. Koang, Poly-GCL would start exporting gas by 2021.         

The gas field commissioning bid victory marks a major progress for China Oil HBP in Africa. “The deal will improve our operating income,” the company said.   

Founded in 1998, China Oil HBP Group provides integrated solutions for oil and gas resource development and utilization. Headquartered in Beijing, the company owns 30 wholly-owned and holding subsidiaries. The company listed on the Shenzhen Stock Exchange has more than 1300 employees.