A US energy company has discovered a valuable natural gas field in Somogy County, south-western Hungary. El Paso Magyarország Kft, the local subsidiary of Houston-based El Paso Productions, has already started sales negotiations with Hungarian national oil and gas company MOL and regional natural gas distribution firms DDGAZ (majority owned by German energy group RWE) and DEGAZ (held by Germany’s E.ON), said Béla Szanyi, 68, managing director of El Paso Magyarorszag Kft.
He added that although laboratory tests carried out in the UK appeared favorable, it would not be known for certain whether the field could be exploited until after test production.
El Paso is believed to be the first company other than MOL to discover gas in Hungary. Sanyi said that US oil explorers had been in the country since 1933.
El Paso took over the license for the exploration of the Somogy area last year (after completing a merger with another US-based group, the Coastal Corporation). It also acquired the Hungarian division of Coastal, previously known as Coastal Magyarország Kft, which had won the Somogy County concession in 1995.
Exploration costs at the site currently total Ft3 billion ($10.71 million).
Three wells have been drilled so far, of which two (near Dormánd and Lajoskomárom) have yielded only thermal waters. Szanyi said that, until the find at the third well, El Paso was planning to stop exploration and research at the site, which was somewhere near the bottom of its list of priorities.
"Statistically there are usually about seven drills before any results. In this instance we were were lucky to find gas on the third drilling," said Szanyi, adding this was achieved based on three-dimensional seismic tests.
"Laboratory tests show the deposit near the town of Törökkoppány (about 160km south-west of Budapest) in Somogy County has very high quality dry natural gas," said Szanyi. The strike was made on December 17.
"The gas is suitable for industrial purposes and contains 92% methane," Szanyi said. "Our headquarters in Houston are now deciding how to sell it."
As well as negotiating with MOL, El Paso is considering selling the gas to local distributors, or perhaps constructing and fueling a generator near the site which could hook onto the regional power distribution network.
Another option would be to build a pipeline to supply EMA-Power Kft, the company that runs the 69 MW thermal power plant in Dunaújváros (80km east of the drilling site).
This plant generates power and hot water for the nation’s largest steel producer Dunaferr Acélmüvek Rt. It also provides the town’s residents with heating and a paper factory with steam.
József Aranyos, CEO of EMA-Power Kft, said if there was any agreement EMA could consider purchasing gas from El Paso to fuel a planned new power generator. Netherlands-based EPIC Energy Hungary BV (owned by El Paso) holds a 50% stake in EMA-Power and Dunaferr holds 49.9%. Italian-Hungarian energy group Transelektro holds 0.1%.
Click here for the Source – Budapest Sun Online
01.02.2002