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mou to supply lng in sth africa

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    Molopo Signs MOU to Supply LNG in South Africa to Major South African
    Distributor
    Molopo has signed a Memorandum of Understanding to supply a leading South African industrial
    gases company, a part of a global industrial gases group, with LNG generated from Molopo’s
    Free State Gas Field.
    The purchaser of the gas is a major gas distributor with a presence throughout sub-Saharan
    Africa.
    Under the MOU, Molopo may supply up to 80,000 gallons per day of LNG which will be used to
    replace high priced imported LPG with LNG from Molopo’s plant.
    The methane used to generate LNG will be sourced from Molopo’s Free State Gas Field where
    methane is currently venting from old mineral exploration boreholes. Existing production has
    been measured at over 1 million cubic feet/day and Molopo will seek to increase these volumes
    by a programme that includes well work-overs, new wells and the identification of additional gas
    emitting boreholes.
    The MOU allows Molopo to supply smaller amounts of LNG based on production. The existing
    production of 1 MMscf/d should support an initial plant of 10,000 gallon/day. The LNG plant could
    be scaled up as more gas becomes available. Molopo is in discussions with several groups for
    the supply of small scale LNG plants.
    Apart from the sale of LNG, the project may also qualify for carbon credits which would add to
    the value of gas produced.
    Molopo will now undertake a full feasibility study, seek reserve certification and apply to convert
    its Exploration Rights into a Production Right.
    Work to date on the Free State gas project has included:
    • Identification of existing and previously gas emitting boreholes;
    • Measurement of gas flow rates;
    • Gas analysis including gas composition and origin;
    • A 2,000 sample soilgas survey;
    • Magnetometer traverses;
    • Geological mapping;
    • Well workover and new well design plans.
    MOLOPO AUSTRALIA LIMITED
    ABN 79 003 152 154
    Registered Office
    Level 14, 31 Queen Street, Melbourne, Vic. 3000, Australia
    GPO Box 223, Melbourne, Vic. 3001, Australia
    Telephone: (61 3) 9618 8722 Facsimile: (61 3) 9620 2804
    Website: www.molopo.com.au Email: [email protected]
    NSW Office:
    Suite 1006, Level 10, 50 Clarence Street, Sydney, NSW, 2000, Australia
    GPO Box 7075, Sydney, NSW, 2001, Australia
    Telephone: (61 2) 9290 2267 Facsimile: (61 2) 9290 2099
    The soilgas information was integrated with emission data to delineate areas where gas is
    migrating to surface at potentially commercial rates. Three high-graded areas have been
    identified in the Free State that could be developed independently or as one project.
    Molopo’s next phase of work in the region will entail analysis of seismic and other subsurface
    data, interpretation of the petroleum system from gas genesis and migration to potential storage,
    tests to enhance recoveries from existing wells, and identification of leads and drillable
    prospects.
    Molopo is now monitoring on a daily basis gas flows from 10 wells totalling 1 MMscf/d to provide
    the production history to support initial reserves certification, development planning and
    production license application. Monitoring under advice of the independent certifiers will continue
    for the next 3-4 months before the reserves certification process commences.
    Molopo and its South African partner will now work together to complete a definitive formal LNG
    gas sales agreement.
    Issued by: Molopo Australia Limited
    For further information contact: Stephen Mitchell MD 03 9618-8722
    Ric Sotelo CFO 03 9618-8722
 
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