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Gas test wells unveil promising results
Poly GCL’s drilling rig at Calub11

Gas test wells unveil promising results

Pipeline construction to begin next August

Well testing in the two gas appraisal wells drilled in the Calub and Hilala gas fields in the Ogaden basin has shown promising results.

The Chinese petroleum company engaged in gas exploration and development project in south east Ethiopia, Poly-GCL Petroleum Group Holding Limited, last October drilled two appraisal wells dubbed Calub11 and Hilala5. Poly-GCL completed drilling the appraisal wells in December 2015. The company recently conducted well testing that enables it to determine the hydro carbon resources in the Calub and Hilala gas fields.

Reliable sources have told The Reporter that the well testing have yielded promising results. Sources close to the gas development project said that petroleum experts of Poly GCL discovered better results than they had anticipated. “They have noted oil and gas shows in both wells,” sources said. 

Executives of Poly GCl declined to comment on the issue by saying that they are not authorized to speak to the media. A senior official at the Ministry of Mines, Petroleum and Natural Gas confirmed that Poly GCL has identified promising results. “We know that they got positive results. They told us that they are analyzing the results. When they finalize the analysis they would present a formal report to the ministry. That is when we can officially reveal the results,” the official said. “But we heard that they got very encouraging results and that indicate that they would proceed with the gas development project,” he added.

Previously, 10 wells were drilled in the Calub gas fields, out of which eight were made ready for gas production. The Calub gas field is located 1200 km south-east of Addis Ababa. Hilala is located 80 km further to the east. The total gas reserve is estimated at 118 billion cubic meters. The gas fields were first discovered by an American company in 1972 and the gas reserves were confirmed by Russian company, SPEE, in the 1980s.

Sources told The Reporter that the new testing results may increase the gas reserve estimate made many years ago. According to sources, PLOY-GCL will prepare a gas field development plan based on the revised reserve estimate.

In November 2013, Poly GCL signed petroleum development agreement with the Ethiopian Ministry of Mines that would enable the company to develop the Calub and Hilala gas fields located 1200 km south-east of Addis Ababa. The company has also agreed to search for oil and gas in eight exploration blocks in the Ogaden with a total area of  117,151

Poly-GCL plans to construct a 830 km gas pipeline all the way from the Calub and Hilala gas fields in the Ogaden basin to the Port of Djibouti and to build a gas treatment plant at the Djibouti port. The company plans to produce three million tons of Liquefied Natural Gas (LNG) annually and mainly export it to China through the port of Djibouti.  The total amount of natural gas the company plans to pump out from the two gas fields each year is 4 billion cubic meters. The total investment cost of the gas development project is estimated at four billion dollars. The company hopes to start commercial gas production in 2019. The Ministry of Mines, Petroleum and Natural Gas expects the company to launch production at the end of the second GTP term.

Encouraged by the well testing results Poly GCL is poised to expedite the gas development project. The cornerstone for the gas export terminal was laid in Djibouti last month. Sources told The Reporter that construction of the pipeline will commence next August and will be completed within three years.   

Poly-GCL is also acquiring 3D and 2D seismic data from its concession area in the Ogaden basin. The company would drill new exploration wells based on the seismic data. In addition to the planned gas development project, the company hopes to strike oil and gas deposits.