Poly-GCL Petroleum Group Holdings has announced that it is progressing with its $4 billion project to export gas from southeast Ethiopia’s Hilala and Calub gas fields to China following a positive drilling result.

The chinese company had in February said that three sets of oil and gas shows was detected from the two appraisal wells which was spud in 2015.

According to Liang Jin, gas manager at commodities consultancy JYD Information, Poly-GCL will commence works on a pipeline and wharf this year. The phase 1 of exploration and development which involves the construction of a 3 mt/a LNG export plant, pipeline and wharf will need $2.5 billion of investment.

In November 2013, Poly-GCL entered into a five production-sharing contracts with Ethiopia’s Ministry of Mines for two development blocks and eight exploration blocks covering 12 million hectares in the country’s Ogaden Basin. At the end of 2015, the appraisal wells in the development blocks, which account for just 1% of the total acreage was completed. The blocks have recoverable reserves of over 100 bcm of gas, or 600 million boe, Somalistate news reports.

Production test on the project is to begin this year and commence commercial production by the end of 2018 or early 2019.

Anita Fatunji