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All articles in the Gas Monetization Section:


Cameroon Will Host the World’s First Floating LNG

By Sully Manope, in Douala

Move over, Australia, the quiet Atlantic waters offshore Cameroon are steadily on course of hosting the world’s first Floating Liquefied Natural Gas (FLNG) unit.

Golar’s FLNG Hilli, currently under conversion in Singapore’s Keppel Shipyard, is close to moving to West Africa to start its eight-year contract in the second half of 2017. 

Golar, owner and operator of liquefied natural gas carriers; Perenco, the French E&P independent and Cameroon’s state hydrocarbon company Société Nationale des Hydrocarbures (SNH), are partners in the 1.2Million Tonnes Per Annum (MMTPA) FLNG Hilli, which they have been developing since November 2014.

Shell’s bigger Prelude FLNG project, planned for offshore Western Australia, took Final Investment Decision (FID) in 2011, four years earlier than the September 2015 FID for FLNG Hilli. But Prelude FLNG is a 5.3MMTPA project with all the issues of a large LNG facility. With 488m in length and 74m in width, it is the largest facility of its kind. It will monetize the resources in the 3Tcf Prelude natural gas field, discovered in 2007. Partners in the project include Shell, 67.5%, INPEX, 17.5%; KOGAS, 10% and CPC, 5%.

Golar has spoken with certainty about the scheduled delivery of the conversion project and claims it is within its $1.2Billion budget. Shell speaks less of timing of delivery and more of the might of the Prelude: ”Hundreds of engineers from across the world have combined their experience and expertise to design the world’s largest floating offshore facility”, the company says on its website. “It will be used to help open up new natural gas fields at sea that are currently considered too costly or difficult to develop”. Prelude FLNG is said to be the largest of its kind, but the world, really, does not yet know of any stationary gas floater! Module installation work for the Prelude FLNG has been completed at Samsung Heavy Industries’ Geoje shipyard in South Korea and, in the words of the JGC, which is contracted to support the completions work for the FLNG’s safe and on-schedule completion, ”commissioning is well and truly underway.” Still, it is likely that this project is not commissioned until the third quarter of 2017.

The Cameroon project is based on the allocation of 500 Bcf of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the FLNG Hilli. The 1.2MMTPA of LNG, represents approximately 50% of the vessel’s nameplate production capacity.


Nigeria’s LPG Consumption Inches to 500,000Metric Tonnes Per Annum

Consumption of Liquefied Petroleum Gas (Cooking Gas), reached 500,000Metric Tonnes in 2016, according to Dapo Adesina, Chairman of the Nigeria Liquefied Petroleum GAS Association.

It was the first year in which the Nigerian Liquefied Natural Gas (NLNG), which has been the main supplier of the fuel since 2004, broke even on the project.

The company provided 350,000 Metric Tonnes, or 70% of the consumption, in 2016. Other suppliers included NNPC refineries , but the consumption is still far short of the World Bank estimated market potential for the country which, as far back as 2004, was 3.2Million Tonnes Per Annum.

NLNG was instructed by the government of President Olusegun Obasanjo administration to start supplying the market in 2003, by which time the refineries had almost entirely ceased supplies and there was a near zero supply to the market, leading, itself, to significant reduction in demand.

The NLNG intervention, which started with 70,000Metric Tonnes Per Year allocation, thus guaranteed some security of supply, which led to increased demand from what was clearly a low base.

By 2012, the company had increased its allocation to 150,000 Metric Tonnes. It increased to 250,000 Metric Tonnes in 2013 due to growing demand.


Ophir Says Fortuna LNG Will Be One of A Handful of FIDs in 2017

Ophir Energy says that Final Investment Decision for Fortuna “will be one of a handful of global FIDs of a green-field LNG project in 2017”.

Fortuna is located offshore Equatorial Guinea. In November 2016, Ophir signed a Shareholders’ Agreement with OneLNG in November 2016 for the formation of a Joint Venture that will develop and finance the Fortuna FLNG project.
Ophir is excited that the establishment of a Joint Venture with other partners “means we can now move the Fortuna FLNG Project towards FID in mid-2017. At FID, the project NPV will be a healthy multiple of the $120Million of capital we are committing before first gas”

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Three New Plants Add 270MMscf/d Capacity to Nigeria’s Domgas Market

By Toyin Akinosho, in Abuja

The Utorogu NAG 2 Plant, a 150MMscf/d capacity gas plant to process Non Associated Gas on the Utorogu field in Oil Mining Lease (OML) 34, has been commissioned.

The Oredo-Obale gas pipeline has been completed, so the 80MMscf/d Oredo gas plant can now supply gas. Also on stream is a 40MMscf/d capacity gas processing plant on the Odidi field in OML 42, the first of two phases, according to David Ige, who was Executive Director in charge of Gas and Power at the NNPC until May 2015.

The combined 270MMscf/d capacity was unlocked between December 2016 and February 2017. Nigeria can certainly do with this volume in its domestic gas market, especially for power, where gas supply has been severely constrained.

But Layiwola Fatona, Chief Executive Officer of the NDWestern Limited, a Nigerian upstream independent which holds 45% equity in the Utorogu NAG 2 plant, says that questions about gas plant commissioning are not the right ones to ask at this time.

“So what? Are you paying for the gas taken and not paid for?” he asks a reporter with Africa Oil+Gas Report. “What is the big deal about commissioning NAG2. Or NAG 3, when no one will pay for the gas being taken?”
Gas producers in Nigeria have, of recent, complained about lack of payment for gas supply to power plants mostly owned by the government.

Dr. Fatona queries: “Are we running a Father Christmas enterprise?”


Egypt’s New Found Energy Independence Will Be Short-lived

Egypt’s insatiable appetite for natural gas will ensure its return to importation of gas in the next six to seven years, according to an analysis of its ongoing projects, new fields and increasing gas demand.
The country became a net importer of the fluid in 2013 after production declines fostered the inability to fuel its power plants, industries and millions of households.
Then almost as dramatically as the shortage began, surplus arrived. Energy companies announced massive gas projects, found huge reserves and helped turn the tide.
The Egyptian ministry of Petroleum announced, late in 2016, a cessation of imported gas from the year 2018, as new projects come on stream to create a net surplus in supply.

Details of the transition from declining reserves to surplus to likely decline are published in the Volume 18, No2, 2017 edition of the Africa Oil+Gas Report


No Field Development Plan (FDP) For Oil Projects Without A Feasible Gas Utilisation Plan

Nigeria’s new-draft National Gas Policy envisages that the DPR, the country’s Petroleum Regulatory Agency, will no longer approve a field development plan for a gas prone oil field, unless there is a clear, feasible gas utilization plan.

This regulation has been in the statute books for over 15 years, but the draft gas policy says it has been weakly enforced.

“We need to be convinced that your gas utilization plan is feasible, that you’re going to work the plan”, Gbite Adeniji, Senior Technical Adviser, Upstream & Gas to the Minister of state for Petroleum, told the November 2016 monthly breakfast meeting of the Nigerian South Africa Chamber of Commerce. “Companies will be encouraged to take advantage of existing nearby infrastructure for their gas utilization plan, instead of coming up with plans that are assembled just to get approval for the oilfield development”.


OB3 Is 80% Completed

By Fred Akanni
Nigeria’s Ministry of Petroleum Resources says that the Obiafu-Obrikom-Oben (OB3) gas pipeline is about 80% completed.
Gbite Adeniji, Senior Technical Adviser, Upstream &Gas to the Minister of state for Petroleum, announced this at the monthly breakfast meeting of the Nigerian South Africa Chamber of Commerce.
But in a twist, Mr. Adeniji implored the audience (comprising of Upstream oil and gas company representatives as well as energy lawyers and bankers), to “pay close attention to and monitor the progress of the construction of this very important pipeline”.
Contract for the construction of the OB3 was awarded in 2011. At 48 inches, it remains the largest diameter pipe size to be built in Nigeria. At 127km in length, starting from the Intermediate Pigging station at Umukwata in Delta State and terminating at Oben Node in Edo State, it is the first gas pipeline, scheduled for the domestic market, to transport gas from the gas rich east of the country to the demand centres in the west of Nigeria.
“For this reason we should all be focused on its completion”, Adeniji insisted. “Let us vigorously engage with it”.


Nigerian Gas Company Splits into Two

By McJohn Adjoto

The Nigerian Gas Company (NGC) has been split into two, in order to take advantage of the emerging gas market.
The two successor companies, both subsidiaries of the state hydrocarbon company NNPC, are known as Nigerian Gas Processing and Transmission Company (NGPTC) and Nigerian Gas Marketing Company (NGMC).

The old NGC operated over 2,000km of gas pipelines all over the country and was responsible for (1), the ongoing looping (doubling of capacity) of the Escravos Lagos Pipeline System, (2) superintending the construction of the Obiafu-Obrikom-Oben (OB3) gas pipeline, as well as (3) work on investment decision regarding the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, for which bids for Build, Operate and Transfer (BOT) are currently being evaluated.

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Nigerian Government to Tweak the Gas Master Plan

By Sully Manope

The Nigeria Ministry of Petroleum plans to do away with the three Central Processing Facilities (CPFs), the centerpiece of the infrastructure segment of the Gas Master Plan.

In their place, “the government will encourage the development of processing plants on an opportunistic basis”, according to Gbite Adeniji, Senior Technical Adviser, Upstream &Gas at the Ministry of Petroleum in Abuja.

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TOTAL Will Operate Cote D’Ivoire’s LNG Re-gasification Terminal

A consortium led by French major TOTAL has been awarded the rights to build and operate a liquefied natural gas (LNG) re-gasification terminal in Ivory Coast with a capacity of three million tons per year (3MMTPA).

The decision announced by the Government of the Ivory Coast on October 4, 2016 was followed by the signature of the shareholders’ agreement in Abidjan between TOTAL, which will operate the project with a 34% interest, national companies PetroCI (11%) and CI Energies (5%) as well as SOCAR (26%), Shell (13%), Golar (6%) and Endeavor Energy (5%).

TOTAL will use the terminal to supply LNG volumes from its global portfolio in proportion to its participating interest in the project. The re-gasification terminal project is expected to become operational by mid 2018.

“This project illustrates TOTAL’s strategy to develop new gas markets by unlocking access to LNG for fast-growing economies. Working closely with our partners enabled us to put together an integrated proposal combining LNG supply and import infrastructure through a floating storage and re-gasification unit,” said Philippe Sauquet, the company’s President Gas, Renewables and Power. “We are very pleased to have been selected by the Ivorian authorities to manage this project, which will meet growing domestic and regional needs for gas and power.”

The project involves the construction of a terminal with a floating storage and re-gasification unit (FSRU) in Vridi, Abidjan area, and a pipeline connecting the FSRU to existing and planned power plants in Abidjan, as well as to regional markets connected to the Ivorian network. This will enable Ivory Coast to become the first regional LNG import Hub in West Africa, and to meet both regional and domestic demand.

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