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    Block Strikes Georgian Gas Deal


The deal allows Block to monetise gas at its West Rustavi field.

by: Joseph Murphy

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Block Strikes Georgian Gas Deal

Georgia-focused explorer Block Energy has reached a deal to sell gas from its flagship West Rustavi field to a local supplier.

The sales agreement was signed with Bago, one of the largest private gas suppliers in the country, Block said in a statement on October 30. Under the contract, which runs until December 31 2022, Bagos will pay $5.24 per 1,000 ft3 of gas. It will also cover the cost of building infrastructure to supply West-Rustavi’s gas to Georgia’s distribution network. Sales are due to begin in the first quarter of next year.

“We are delighted to sign this agreement with Bago, one of Georgia's largest domestic private gas traders with ready access to extensive infrastructure capable of handling large volumes of gas,” Block CEO Paul Haywood commented. “West Rustavi is the site of multiple historic gas discoveries, which we will test in the course of our work programme. When we have made further progress with our campaign, we look forward to providing guidance for West Rustavi oil and gas production for 2020.”

West Rustavi – the largest of three fields operated by Block in western Georgia – is estimated by the company to hold 508bn ft3 of contingent gas. Its commercial potential was shown earlier this year when Block tested its 16aZ well, achieving impressive flow rates.

16aZ was brought back online in early July and was initially reported as flowing 295b/day of oil and 390,000 ft³/day of gas. Block is currently flaring this gas, under a temporary permit from the government, as it has no means of transporting it to market.

Block is now working on a sidetrack well at West Rustavi, 38Z, and has plans to sidetrack three other wells to test one of the field’s gas discoveries, as well as drill a new gas well.