(Ecofin Agency) - In Tanzania, Solo Oil on Thursday announced that it has increased its interest in the Kiliwani North Development Licence to 10%.

The company had an initial interest of 6.175% in the licence and is to pay Aminex $2.16 million to increase the interest by 3.825% to 10%.

A Gas Sales Agreement (GSA) was signed with the Tanzanian Petroleum development Corporation (TDPC) in early January and commissioning of the Kiliwani North-1 well which is located in the Kiliwani North Development Licence, has been ongoing with gas production scheduled to begin soon.  Gas from the well will at first be used to commission the new Songo Songo gas treatment plant, before it is conveyed by pipeline to Dar es Salaam to be sold into the local market at an arranged price of about $3.07/Mmscf.

The basic terms of the proposed license acquisition includes Solo cutting its option to procure an additional 6.175% in the licence in the Second Tranche Acquisition which was announced on October 14, 2014 and amended by TPDC on October 5, 2015. Under the Second Tranche Acquisition Solo will obtain an additional 3.825% of the license from Aminex for $2,168,000.

The partners have decided to sign a formal sale and purchase agreement SPA in 30 days. Upon signing the agreement, Solo will pay $500,000 while the remaining balance will be paid on or before 30 April 2016.

Aminex is the operator of the licence with 55.575% alongside RAK Gas LLC with 23.75%, Solo Oil plc with 6.175%, Bounty Oil & Gas NL with 9.05% and TPDC with 5%, following TPDC’s back in on October 5. Meanwhile, on conclusion of the sale and purchase agreement, Aminex will hold 51.75% and Solo will hold 10% interest, Energy-pedia reports.

Anita Fatunji