In February 2023, Jadestone completed the acquisition of a 9.52% non-operated interest in the producing Sinphuhorm gas field and a 27.2% interest in the Dong Mun gas discovery onshore northeast Thailand.
The Sinphuhorm gas field was discovered in 1983 and commenced production in 2006. The reservoir is the Permian age fractured carbonate Pha Nok Khao formation, which contains dry gas with a low gas condensate ratio of c.4 bbls/mmcf.
The field has been developed via three surface pads in the central and southern part of the field. Pressure depletion trends confirm lower connectivity between the northern and southern parts of the field, with further development potential existing to the north as a result. The field produced an average of 97 mmcfd in 2022. A total of 506 bcf of gas and 2.1 mmbbls of condensate had been produced by 31 December 2021, equating to a 46% recovery factor.
The Sinphuhorm well pads are tied back to a central gas plant with 140 mmcfd capacity and the ability to stabilise small amounts of condensate. The plant, with its simple design, enjoys high reliability, uptime and performance, with a 16-year track record of safe operations. Operating costs are very low at c.US$3/boe and decommissioning costs net to the acquired 9.52% interest are estimated at approximately US$2 million.
Gas from Sinphuhorm is exported via a 64 kilometre pipeline to the Nam Phong power plant, the largest in northeast Thailand. Sinphuhorm gas is contracted under a long-term take-or-pay GSA with PTT, as the gas buyer. The current GSA extends over the remaining term of the concession, which expires in March 2031. Gas demand has consistently exceeded 90 mmcfd over the last four years and is expected to remain strong in the foreseeable future amid declining regional supplies and high import prices. The Sinphuhorm gas price is linked to high sulphur fuel oil. Sinphuhorm condensate is sold to PTT under a long-term condensate sales agreement.
A project to boost compression at the field is already underway with a gross cost estimate of US$62 million and is expected to be onstream in Q3 2024. In addition, further infill drilling is planned in 2024. Management estimates that at 31 December 2021, the field contained gross 2P reserves of 288 bcf of gas and 0.82 mmbbls of condensate (27 bcf and 0.08 mmbbls net to Jadestone).
Natural gas from Sinphuhorm plays a critical role in meeting the increasing demand for cleaner-burning fuel as the Thailand energy market and economy transitions to a lower carbon future. The operations at Sinphuhorm have a Scope 1&2 GHG emissions intensity of ~ 7.5 kg CO2e/boe, well below the global upstream average. The operator of the Sinphuhorm has stated publicly that it plans to explore the potential for a carbon, capture and storage project at the field, which could reduce absolute emissions and intensity even further.
The Dong Mun field is an undeveloped discovery in the L27/43 concession (100% APICO) approximately 80km southeast of Sinphuhorm. Gas was tested in the PNK carbonate formation (same reservoir setting as Sinphuhorm) with APICO estimating 56 bcf gross 2C contingent resources for the discovery. APICO is considering developing Dong Mun through a phased approach – initially through a compressed natural gas scheme and then a small-scale LNG development.