ISLAMABAD, March 22: The government on Friday signed a gas sales agreement with Sawan Joint Venture for the sale of 170 mmcfd of gas that is expected to provide a saving of $200 million per annum through import substitution.

The Sawan Joint Venture led by Austrian oil and gas company OMV (Pakistan) and Sui Northern Gas Pipelines Limited (SNGPL) would deliver gas from phase-2 of the field development in Sindh.

Located in Sindh, Sawan field was discovered by the operator OMV in January 1998. Following extensive 3D seismic appraisal work and drilling of a successful appraisal well, the gas field was declared commercial by the joint venture in December 1999.

As of December 2001, the field is estimated to contain recoverable sales gas reserves of 1.46 trillion cubic feet. The JV will invest $100 million over a period of two years for this project.

The OMV would be awarding the contract for the gas processing facilities in April this year enabling first gas flow into the system by the end of 2003.

Secretary petroleum M. Abdullah Yousaf, General Manager OMV Warner Ladwein, managing director AGIP-Petroleum Mike Buck and head managing director SNGPL signed agreement on behalf of their respective sides.