Volga Gas Plc (VGAS.LN), a oil and gas exploration and production group operating in the Volga Region of European Russia, announced Thursday that an agreement has been signed with Trans Nafta or TN to purchase a 75% direct interest in gas processing facilities which will be used for the Company's Vostochny Makarovskoye or VM gas and condensate field for RUB187 million ($6.2 million) has been paid.
MAIN FACTS:
-In November 2008, a sum of RUB600 million ($20 million) was paid as an advance on the purchase of the interest in the GPU.
-As a result of this agreement, Gaznefteservice or GNS, a company 100% owned by the Volga Gas group, will have a direct 75% interest in a Gas Processing Unit or GPU constructed on a site 7km from the VM field.
-The plant is to be operated by a company which is 75% owned by GNS. .
-As reported in the 2009 Interim Results announcement, the two initial wells on the VM field have been connected by intra-field pipelines to the gas plant being constructed by TN on its Dobrinskoye field. Before the GPU can become fully operational, it will be necessary to transfer a sulphur treatment unit from the VM license area to the GPU.
-This process, with the required regulatory approvals, is expected to take up to nine months. Meanwhile, it may be possible to commence long term test production from the VM field during 2010.