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BHP go-ahead for Zamzama gas field

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BHP Billiton has announced approval for the Phase-2 development of the Zamzama gas field in Pakistan. This follows the signing of separate agreements between the Zamzama Joint Venture Partnership, the Government of Pakistan and the Sui Southern Gas Company Limited.

The Zamzama Phase-2 development, scheduled for completion in the third quarter of 2007, will increase plant production capacity by 50% to a total of 450 million cubic feet of gas per day (100%). Total capital costs for the project are estimated at $US120 million (BHP Billiton share approximately $US46 million).

The Zamzama Phase-2 development accelerates commercialisation of additional gas reserves confirmed as a result of successful field appraisal. The current field reserves are estimated at 2.3 trillion cubic feet of gas, making Zamzama the fourth largest gas field in Pakistan, covering an area of approximately 120 km² in Dadu, Sindh Province. Gas production from the Zamzama field commenced in March 2001, through an early production system. This was followed by the Phase-1 development which came on line in July 2003. Zamzama currently supplies an average of 270 million cubic feet of gas per day to our customers, the Sui Southern Gas Company and Sui Northern Gas Pipelines Limited.

"The agreement to proceed with the Phase-2 development of Zamzama marks another important milestone in our expanding and profitable portfolio in Pakistan," said Mr Philip Aiken, Group President of Energy for BHP Billiton. "The Phase-1 development of Zamzama was completed four months ahead of schedule as well as within the original budget and, since commissioning in mid-2003, the operational reliability has been excellent. After the completion of Phase-2, the Zamzama field will have the potential to supply a significant proportion of the country's daily gas demand, reducing Pakistan's reliance on fuel imports."

BHP Billiton is also progressing the installation of a new 40 kilometre pipeline which will transport condensate produced at Zamzama to the Karachi-Multan crude oil pipeline and then to the PARCO refinery, thereby reducing reliance on the current mode of road transport. At the completion of the Phase-2 development, condensate production from Zamzama will reach approximately 3,000 barrels per day.

BHP Billiton holds a 38.5 percent interest in the Zamzama field and is the Operator. The other partners are: Government Holdings (Private) Ltd (25 percent), Premier Kufpec Exploration Ltd (18.75 percent) and Eni (17.75 percent).

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