Geoproduction Oil and Gas Colombia last week announced it has signed a letter of intent with Altenesol LNG Colombia to supply natural gas for Altenesol’s Nataly 1 liquefied natural gas (LNG) project.
Altenesol plans to build the plant in the Colombia’s Cordoba province near Geoproduction’s Jobo Station, which will process the gas produced from Geoproduction’s Esperanza block. Altenesol anticipates the plant will be completed in about 2 years.
The deal involves the sale of 17 MMcf of natural gas for a 10-year period at a starting price in the range of USD 4.50 to USD 5.25 per MMcf. The contract includes a 5-year extension option contingent upon the success of a four to five well drilling program to begin during the middle of next year.
The drilling program next year will only target exploration prospects that are corroborated by 3D seismic. The Esperanza block has proven plus probable reserves of 95 Bcf.
Geoproduction is a subsidiary of Shona Energy. Shona has two contracts in place for the sale of gas produced at Esperanza, representing a total of up to 24 MMcf/D.