China’s POLY-GCL Petroleum Could Start Drilling for Gas in Ethiopia by June-July

China’s POLY-GCL Petroleum Group Holdings Ltd is expected to begin drilling for gas in Ethiopia by June or July, according to country’s mines minister.

News agency Reuters reported Thursday that the Chinese company is carrying out seismic tests in Calub and Hilala fields in the southeast Ogaden Basin.

"They will enter the digging phase around June and July (this year)," he told Reuters. "2016 will be a year when major works such the designing and laying of pipelines that will connect with an LNG plant in Djibouti for export will also be completed."

The two fields have deposits of 4.7 trillion cu feet of gas and 13.6 million barrels of associated liquids.

China POLY Group and GCL Group have been long term partners and founded POLY-GCL Petroleum Group Holdings Limited in order to develop oil and gas in Ethiopia. In November 2013, POLY-GCL Petroleum signed five Production Sharing Agreements (PSAs) with the Ministry of Mines of Ethiopia.

The contract area in the Ogaden Basin consists of two development blocks and eight exploration blocks. It has a gross area of 117,151 square kilometers.

The integrated project involves oil & gas exploration and development, as well as the construction of a pipeline, LNG plant and marine terminal, according to company’s website. An oil and gas pipeline will be constructed from Ethiopia to Djibouti, while the LNG liquefaction plant and marine export terminal will be constructed in Djibouti.

The LNG productivity of phase one is expected to reach 3.0 million tons per year, with a by-product condensate oil production of 0.3 million tons per year. The estimated investment will be approximately $4 billion. The company expects to achieve first LNG by mid-to-late 2018.