New TAG Oil pipeline nears completion; paves way for natural gas sales and field development

VANCOUVER, Canada -- TAG Oil Ltd. has announced that the pipeline construction connecting the Cheal-E development area to TAG's main Cheal-A production infrastructure has nearly been completed. The $3.3-million project was completed on budget and ahead of schedule.

"The new pipeline is an important addition to TAG's overall infrastructure in the Taranaki region," Max Murray, TAG Oil's New Zealand country manager, said. "It allows us to significantly reduce operating costs even while generating additional revenues, and it gives us the ability to quickly monetize future oil and gas wells drilled in the Cheal-E development area."

The 4-in. pipeline connecting the new Cheal-E site to TAG's Cheal-A site production facility is currently undergoing pre-commissioning and rigorous testing. It will shortly, over the next week, move into the commissioning phase, at which point a three-phase well stream of fluids (oil, gas and water) will be processed through the Cheal-A site production facility.

In addition to the pipeline installation, an 11 kV HV electrical cable and a fibre optic cable have been installed to improve the power supply and communications between the Cheal-E and the Cheal-A production sites.

"Along with the benefits of increased production revenue from the sale of gas, we are very pleased to eliminate the need to flare the solution gas at Cheal-E onsite. The additional associated gas will be sold under an existing Gas Sales Agreement," Murray added.