Zarara plans gas production for Lamu

25 October 2016, Week 42, Issue 662

Zarara Oil and Gas is set to drill a well for natural gas in the onshore L-4 licence, in Kenya’s Lamu Basin, by June 2017. The company, a subsidiary of Midway Resources International (MRI), is preparing to spud the Pate 2 well by June 2017 and has contracted North Sea Well Engineering (Norwell) to provide drilling management services.

Zarara’s general manager, Peter Nduru, said the firm’s design, engineering and procurement logistics covers the drilling of two wells, with the second dependent on success of the first, near the Pate 1 well drilled in 1971 by Royal Dutch Shell and BP. 

“Pate 2 is expected to take 120 days to drill, test and complete. If testing shows commercial quantities of gas, it will be completed as a producer through early production system as quickly as practicable,” he said. 

It is envisaged the Pate 3 well would be drilled from the Pate 2 pad, and would involve the use of directional drilling to a vertical depth of 4,500 metres. Total depth will be about 5,000 metres.

The Pate 1 well was drilled in the northwest corner of Pate Island, 70 km southwest of the Kenya-Somali border and 32 km northeast of Lamu. The well was abandoned as it had been seeking oil. 

MRI owns 75% in the L-4 and L-13 licences, via Zarara. Swiss Oil Holdings has a 15% stake, while the remainder is held by the Kenyan government. In November 2015, the Kenyan Ministry of Energy granted Zarara an 18-month extension to the licence to June 2017. 

Nduru said finding gas would allow the company to sell production for local power generation. “The first phase assumes appraisal drilling and completing for production [of] at least two wells. Depending on the number of wells and their deliverability, natural gas would be converted to electricity by Kenya Power,” he said.

MRI will shortly commence a pre-feasibility study for the Phase 1 development, with support in the form of a grant from the United States Trade and Development Agency (USTDA).

Zarara and USTDA signed a US$996,600 grant in September 2016 on the evaluation of the technical, economic and environmental aspects of a proposed Lamu gas-to-power project on Pate Island. The project could add 50-200 MW of new generation capacity.