Drilling of new wells in Shwe gas field project to start early 2020

The overall Shwe natural gas project includes the A-1 and A-3 blocks. The A-block contains Shwe and Shwe Phyu fields and A-3 contains the Mya field.

The eight development wells will be dug first at the Shwe and Shwe Phyu fields in block A-1and the work is expected to take eight months. Once the wells are completed, a pipeline will connect to the platforms and commercial gas production is expected to begin end-2021 or early 2022, said Posco International Myanmar Production Engineer U Win Nyunt Aung.

The sites of the eight wells have already been explored and preliminary yield calculations for the sites have been completed.
Daewoo International, which after restructuring became Posco International in 2016, started exploration of the Shwe offshore natural gas reserve in Myanmar in 2000 and began commercial production in 2013, after drilling and development for more than a decade.

Ownership of the Shwe natural gas project is split between Posco International, which owns 51percent, Myanmar Oil and Gas Enterprise (MOGE) 15pc, Korea Gas Corp 8.5pc, and Indian companies Oil and Natural Gas Corporation (ONGC) Videsh and GAIL Ltd which own 17pc and 8.5pc, respectively.

In 2016, Daewoo and Posco International merged, and Posco ‘s share increased to 51 pc after its takeover as the operator of the project in early 2019.

A large portion of the natural gas from the Shwe field is sold to China National Petroleum Corporation (CNPC), and it is transported through a pipeline opened in 2013.

Some 500 million cubic feet of gas is sent to China daily, while another 120 million cubic feet is for use in Myanmar.

The field produced about 740 million cubic feet of gas daily in the beginning. This has tapered off to about 630 million cubic feet at present, althouh production can be ramped up to about 650 million cubic feet.

“It’s normal to have a gradual decline in production. It depends on the management of the reservoir. Better reservoir management can lengthen production life. Without proper management of the reservoir, production would decline quickly when demand is high. Since its discovery, the Shwe site is in good condition.We’re drilling now because we want to cover the decline. The current wells yield about 50 million cubic feet, and if we extract only 30 million cubic feet from next oil wells, the production life of the earlier wells can be extended without changing total amount of production,” U Win Nyunt Aung said.

Shwe Natural Gas Project is a 35 years project and still has 29 years left. After the commercial extraction wells started in block A-1, companies can start commercial extraction at A-3 block Mya in 2025, said U Win Nyunt Aung.

“Production can be maintained at the Shwe field with the new wells, but will taper off eventually. This also why we are starting to develop the Mya field. The Mya field is in deeper water and will cost more to develop. Over the coming 20 to 25 years, we will also start to develop the AD-7 block,” he added.

Exploration in Ad-7 has shown the site has natural gas,and development wells can be drilled after three or four more assessment wells have been completed. There might be commercial extractions from there in 2025 and if so, the gas from AD-7 will be exported to Bangladesh or China via current pipeline.


Source: The Myanmar Times

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