Selva Field Development gas plant construction Completed
Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to announce that construction of the gas plant at the Podere Maiar-1 wellsite of the Selva field in the Po Valley, Italy has been completed. The connection to the gas grid operated by SNAM is also complete allowing the delivery of gas to the market as soon as final operational and safety inspections are complete, which the operator, Po Valley Energy anticipates by the end of May.
Po Valley Operations Pty Limited (“PVO”), a wholly owned subsidiary of Po Valley Energy Limited (ASX: PVE) is the Operator of the Selva Malvezzi production concession with 63% ownership interest and Prospex has the remaining 37% working interest.
Highlights
• Podere Maiar-1 (“PM-1”) gas plant development is complete and ready for commissioning
• SNAM connections are complete, enabling delivery of PM-1 gas to the SNAM gas grid in Italy
• Commercial arrangements complete, allowing PM-1 gas to be delivered under the gas supply agreement announced on 14 February 2023
• With the SNAM connection and transmission arrangements finalised, Po Valley Operations has initiated the process of recovering €757,000 performance bond funds (100% basis – €280,090 net to Prospex), previously deposited with SNAM
• PM-1 gas plant construction and development achieved with only minor cost increases. This result is particularly noteworthy given the current inflationary environment and supply chain issues
• First gas supply from PM-1 is contingent upon final operation and safety inspection. PVO anticipates this prior to the end of the month
The completion of SNAM connections and commercial arrangements paves the way for the delivery of PM-1 gas to the SNAM grid in Italy. With these connections and arrangements in place, PM-1 gas can now be delivered under the gas supply agreement, announced on 14 February 2023.
Additionally, the successful completion of the SNAM connection and transmission arrangements has resulted in PVO initiating the process for the recovery of the performance bond funds deposited with SNAM. The amount involved in this recovery process is €757,000 (100% basis), with €280,090 net to Prospex.
Construction and grid connection has been largely completed on schedule and budget, with only a 3% cost difference to budgeted expenditure. This amounts to ~€132,000 (100% basis), €48,840 net to Prospex. Given the global supply chain concerns the joint venture is delighted with this outcome.
Initial production of PM-1 gas is contingent on the signoff of the final operation and safety inspection. PVO anticipates that this will occur before the end of May 2023.
Mark Routh, Prospex’s CEO, commented:
“I congratulate the team at Po Valley for delivering a safe and very high-quality gas plant development. This has been achieved by PVO and the main contractor, TESI working with the SNAM construction engineers to install the new gas processing plant and the construction and connection to the SNAM operated national grid network. This has in turn triggered the recovery of the performance bond deposited with SNAM worth €280,090 to Prospex.
“I was fortunate to visit the well site at the same time as the PVE board in late April and saw first-hand the high standards of installed equipment and importantly the robust safety culture of the TESI and PVO teams. The development has been delivered on schedule and within our budgeted contingency, which is a significant achievement with the ongoing supply chain challenges facing the industry generally. I look forward to updating shareholders on the commissioning and delivery of first gas to the SNAM grid, which the operator anticipates by the end of May.”
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