ENI Consolidates Lead as Africa’s Top Hydrocarbon Producer

By Toyin Akinosho, in Lagos
The continent’s leading domestic gas supplier is close to becoming its major exporter
With an offtaker firmly secured for its floating LNG project offshore Mozambique, Italian major ENI has consolidated its position as the lead producer and merchant of Africa’s gas resources.

The signing of a binding LNG sale agreement with BP Poseidon Ltd, for the sale, of all the volumes of LNG that will be produced from the Coral South Floating LNG facility, puts ENI in a position to challenge Shell as the continent’s top gas exporter.
ENI is already far ahead of any of the majors as the go-to supplier of gas in the domestic economy, especially  for electrical power production, but with the 22MMTPA (Million tons per annum) Nigerian LNG, which Shell dominates, it has struggled to surpass the Anglo Dutch major in export.

The Coral South Floating LNG facility will have a capacity 3.3MTPA of LNG, about a sixth of Nigerian LNG capacity, but ENI holds 50% of Area 4, whereas Shell has 26% of Nigerian LNG. The sales agreement for Coral has been approved by the Government of Mozambique and is conditional on the Final Investment Decision (FID) of the whole project which is expected within 2016.

Gas has made ENI Africa’s top hydrocarbon producer. Whereas it lags behind in liquids production, it has been aggressive with natural gas. Its Zohr project offshore Egypt, will deliver 700 Million standard cubic feet a day (MMscf/d) at peak, sometime in 2019.

ENI is involved in gas projects in all the countries in which it has production. Gas sales from Libya averaged 911MMscf/d in 2014, despite the war. In Egypt, the company produced 649.8MMscf/d, while it delivered 324.1MMscf/d in Nigeria and 145.1MMscf/d in Congo. ENI produced a total of 196.2MMsc/d in Algeria, Angola and Tunisia combined.

In the same year Shell came a distant second to ENI in African gas production (domestic and export) in 2014 with output of 791MMscf/d and TOTAL produced 693MMscf/d, both of them mainly from Nigeria.

ENI’s largest gas project on the continent remains the Western Gas project in Libya, whose output is split 20:80 between domestic use and export (to Italy). ENI contributes significantly to the Egyptian national domestic gas grid and participates in major gas projects in Nigeria (it is responsible for over 10% of the country’s electricity generation with a gas to power project that delivers roughly 120MMsc/d to a thermal plant with 480MW nameplate capacity). The company is also the leading natural gas producer in Congo, where it constructed the Centrale Electrique du Congo (CEC), a 300 MW gas-fueled power station that is expandable to 450 MW.

The other Concessionaires in Area 4 Mozambique are Galp Energia, KOGAS and Empresa Nacional de Hidrocarbonetos (ENH) with a 10% stake each. CNPC owns a 20% indirect interest in Area 4 through Eni East Africa.



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