Mosaic Oil (MOS) has just confirmed in a Presentation today that...

Mosaic Oil (MOS) has just confirmed in a Presentation today that it expects to sign-up a J/V partner by end calendar 2009.
Now I know this is not the MOS thread, but it is very much pertinent to BOW ( and many of the other CSG players).
I am aware that some of the CSG players are in fact very interested in the UGS concept.

The CSG producers need somewhere to park their gas they produce when they are ramping up their wells. When the wells are being dewatered, it produces gas in ever increasing quantities. When the well is dewatered, it produces mainly gas and little water. In the dewatering stage that rampup gas is flared, or directed somewhere else eg power stations, LNG prod (if they have access to these users).
Usually it is not saleable because of the small qty, and undetermined qty and supply.
Now i think the Govt has banned flaring?

SO what to do with this valuable production?
Enter the UGS facility.

Refer to MOS announcement:
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00988982

MOS will use its depleted gas fields in QLD to store other coys ramp-up CSG gas. It will store it at a toll, or buy it and then resell it or whatever.
These fields will store about 75 PJ of gas.
This is almost enough gas to run a 1.5mtpa LNG Train for a year (refer AOE announcement 16 April 2009).
So that qty of gas is very very valuable -big resource.

These UGS sites are big in USA - hundreds of them, and have been going for years - so not a new concept.

MOS Pres states:

Underground Gas Storage - A key value-chain link for CSG to LNG
RBS Morgans Conference –Brisbane, September 2009
•CSG to LNG requires high production capacity
•Hundreds of wells required to provide capacity at start up
•De-watering process key to field deliverability
•Nature of wells makes them difficult to produce choked back
•Ramp Up Gas is the volume produced during dewatering
•Hundreds of wells makes cumulative volume large
•Can’t Flare it
•Short term sales contracts clash with customer drivers
•Ramp Up Gas Storage is a viable solution due to domestic vs LNG price contango and oversupplied domestic market

and:
Commercial strategic venture partner targeted by end of calendar 2009
•Potential partners
–CSG / LNG development company
–Integrated gas producer / supplier
–Long term gas storage provider / trader

and:
Finalise evaluation of gas storage opportunity:
* Secure commercial strategic venture partner by end of calendar 2009

Whats the bet it will be a player like BOW or one of the other CSG players who are serious about actually producing gas?

cheers