Tethys Petroleum Limited is pleased to announce that TethysAralGas LLP, its 100% owned Kazakhstan subsidiary, has signed a gas sales contract for 2015 gas production.
A one year gas supply contract has been signed at a price of US$75/million m3 (US$2.12 per 1000 ft3) net of marketing and distribution costs effective 1 January, 2015 representing a 42% increase over the current realised gas price.
This price has been realised despite falling oil and gas prices in Central Asia due to the impact of the fall in worldwide prices (Henry Hub spot price has fallen 30% to US$108/ million m3 since 1 December, 2014). The achievement of the higher gas prices reflects the company's view that despite these recent influences, the general direction of gas prices is on an upward trend due to the increasing demand from China as it moves from a coal based economy to utilising more gas.
The company believes that once gas shipments commence to China through the already built gas pipeline, it may achieve further increases in pricing some time in 2015.
The gas supply contract has been signed between TethysAralGas LLP and KazTransGas JSC, for the Kyzyloi and Akkulka natural gas fields.
KTG is the national, state-appointed gas operator under Kazakhstan gas law and any domestic sales of gas are effectively made through this state body. TAG will have the ability to export gas to China and other export markets once this option becomes available.
Edited from source by Elizabeth Corner