All articles in the Gas Monetization Section:


ENI Ramps Up Egypt’s Nooros Beyond A Billion

ENI, the Italian explorer, has ramped up production of natural gas in Nooros gas field , offshore Egypt, far beyond 1Billion standard cubic feet a day.

The company itself reports that the field now produces 32 million cubic meters per day, or 1Billion, One Hundred and Thirty Million Standard Cubic Feet a day (1.13Bscf/d).

The volume is equivalent to around 215,000 barrels of oil equivalent per day (BOEPD).
“This production level represents the highest ever recorded by an Eni field in Egypt in the last 50 years”, ENI says in a statement
The company promises even more.

“This significant result has been reached thanks to the start-up of the NW-7 well, the thirteenth drilled within this field. Production levels will increase further by June 2018 when a fourteenth well, currently under drilling, will start-up. This is expected to allow ENI to reach 34Million cubic meters per day (or 1.2Bscf/d) of production, equivalent to around 230,000 BOEPD”.

“The Nooros field was discovered in July 2015 in the Nile Delta offshore area and put into production in record time the following month. It is currently ENI’s main gas producing field in its Egyptian asset portfolio as well as an example of the success of the company’s integrated model. The discovery perfectly exemplifies ENI’s “near field” exploration strategy, aimed at locating potential additional reserves located in proximity to already existing upstream infrastructures. Moreover, thanks to the mature operating environment and the conventional nature of the project, its development constitutes a unique case in the oil and gas industry, exceeding all expectations in terms of expected time and results”.
 
Nooros’ development will also be optimized in the mid-term following the extension of the development lease that will entail new investments, in particular the construction of a new trunkline linking Nooros with the El Gamil onshore treatment plant by year end 2018 and early 2019, ensuring the above production level in the mid-term while maximizing recoverable reserves.

These measures will also include the start-up of Baltim SW (where ENI holds a 50% stake through its affiliate IEOC Production BV, while BP holds the remaining 50%) and will allow the swift start-up of any future exploration potential in the Nile Delta area.
 
In the Nile Delta Concession, where Nooros is located, ENI holds a 75% stake through its affiliate IEOC Production BV, while BP holds the remaining 25%. ENI has been present in Egypt since 1954 and is the country’s main producer with an equity production of more than 250,000 barrels of oil equivalent per day.


‘It’s Frustrating Not To Achieve FID For Fortuna’

Hopes for First Gas By 2022

Ophir Energy has described, as very frustrating, its inability to reach Final Investment Decision for the Fortuna Floating LNG facility in 2017.

The financing for the project, located off Equatorial Guinea,“is the last remaining major milestone before the project can reach FID, and it was very frustrating not to achieve this in 2017”, the company says in its latest update. “We take confidence from Fortuna’s robust, low break even economics with low development costs and world class flow rates that contribute to arguably the most competitive greenfield LNG project in the world today”.

Ophir says that Fortuna FLNG is potentially a transformative project for Ophir. “For a relatively limited forward investment, we are looking to launch a world class development that will offer significant, annuity-like cash flow for 20+ years.

“An annual global LNG demand growth of around 4-5%, combined with a forecast slowing of LNG supply growth beyond 2020 and a tightening supply/demand balance has positioned Fortuna well as it enters production from 2022. A benefit of the current commodity price slump is that we have been able to lock in lower unit pricing for the development.

“We are working towards reaching first gas in 2022, when we can look forward to annuity-like free cash flows from the asset of approximately $150Million per year at current prices”.
Late in 2016, Ophir selected Gunvor Group as preferred off-taker “on attractive commercial terms, as we announced a Brent-linked, free-on-board offtake agreement”.

Upon execution of the commercial terms Gunvor would underwrite the contract capacity of the Gandria FLNG vessel of 2.2 MMTPA.

“Under this agreement, we would retain the option for up to two years from FID to secure an alternative, premium priced market for 1.1 MMTPA of this volume. In addition we would retain the option to market the remaining 0.3-0.5 MMTPA of further offtake from the project.
Our vessel for conversion, the Gandria, is expected to enter the shipyard in early March 2018 to commence early works. Separately, Golar’s first FLNG vessel, FLNG Hilli Episeyo, left the same shipyard and reached its operating location in Cameroon in November 2017.

The vessel is currently being commissioned prior to delivery of its first commercial cargo. The delivery of this first cargo would represent an important step in the de-risking of the midstream component of the Fortuna FLNG project”.


Egypt is Close To Eliminating All Debts Owed To Gas Producers

By Mohammed Jetutu, in Cairo

Egypt is rapidly on course of eliminating debts owed by the state to E&P companies who produce natural gas in the country.

Between January and end of March 2018, Finance Minister Amr El-Garhy reckons, the country would have paid $750Million. The government pledges there would be no debt by the end of second half 2019.

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BP Delivers the First of Two Gas Projects

From discovery to market in three years

British major BP has put, on stream, the Atoll field in Egypt’s North Damietta Concession.
It’s the first of two Egyptian gas projects the company expects to put on stream in 2018. The second is Barakish Baltini SW field.

For Atoll, the target for this first phase development is 300 MMscf/d to the domestic gas market and it has come in two months earlier than scheduled.

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Weak Governance Shuts Out Investment in Nigeria’s Mega Gas Projects, says Lawmaker

There has been an increase in supply of Natural gas into Nigeria’s domestic market, but there has been little progress by way of investment in “mega projects”, in the opinion of Bassey Albert Akpan, a ranking law maker in Nigeria’s Upper House of Legislature.

The Chairman, Committee on Gas Resources in the country’s Senate, argues that “the failure to enact the downstream Gas bill creates the perception that Nigeria’s doors are not sufficiently open for business”. Akpan contends that this particular lack, “advances the view that regulatory frame work remains unclear and inconsistent”.

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Seven Large African Gas Projects Queue Up For FID in 2018

By Toyin Akinosho

Seven sizeable gas projects in Africa, four of them meant for export, are on the queue for final investment decision in 2018.

Three of these projects: ENI operated Baltim SW project in Egypt, Seplat operated Assa North/Ohaji South in Nigeria and BWOffshore led Kudu gas to power in Namibia, are meant for the domestic markets in their countries. Each of these domgas projects will deliver in the range of 300-350MMscf/d, at peak.

The biggest projects; Anadarko’s Area 1 project (6MMTPA) in Mozambique and NLNG’s Train 7 (8MMTPA) in Nigeria are meant for shipment to industrial economies outside the continent, mostly in Asia.

The 2.2MMTPA Fortuna LNG in Equatorial Guinea, is the smallest of the gas export projects.
There are no numbers yet for the deliverable volumes for BP/Kosmos’ Tortue LNG project offshore Senegal. What is known is that the size of the reserves is estimated at 15Tcf.

Full details of 2018 Projects around Africa, including this author’s Kickstarter article: ‘Pregnant with Projects’ and the editorial survey: ‘Who Is Doing What and Where in 2018?’ are available in this link.


Egypt’s Zohr Gas Reaches The Market In Record Time

By Fred Akanni

Expected to reach 1Bscf/d, pumped into the domestic gas grid, by 2019

The massive Zohr gas field in deepwater eastern Mediterranean offshore Egypt has started production, two years after discovery.

The field is producing 350Million standard cubic feet per day.

The gas is being pumped from Zohr to Port Said’s new land station at El-Gameel, where it is being treated and transferred to the national natural-gas network.

ENI, the Italian giant, had promised, almost immediately it discovered the field in September 2015, to deliver the project in record time.

Zohr Gas field is located inside the 3,752km² Shorouk Block, within the Egyptian Exclusive Economic Zone (EEZ), in the Mediterranean Sea. The field is situated more than 150km from the coast.

ENI owns a 100% stake of the Shorouk license, through IEOC Production, and the acreage is operated by Belayim Petroleum Company (Petrobel), a joint venture between IEOC and Egyptian General Petroleum Corporation (EGPC).

ENI was granted approval for the Zohr Development Lease by the Egyptian Natural Gas Holding Company (EGAS) in February 2016. The field is expected to reach full production capacity, around 1Billion cubic feet per day, in 2019.


First Gas Flowing in Algeria’s Reggane Nord Project

The Groupement Reggane Nord (GRN) consortium has commenced production from four out of six Reggane Nord gas fields.
The first wells were put in production on 13 December 2017. A total of ten wells are planned to come on stream by the end of the year.
A ramp up of production targets a flow rate of more than 280 million cubic feet of gas per day by mid-2018.

Reggane Nord is the first gas project that has been brought into production from this prospective region in the south west of Algeria.
With first gas, the commissioning period started in which the performance of the constructed Gas Treatment Plant will be tested and the new built GR5 national gas transport pipeline will be filled with the gas from Reggane Nord.

The project scope is including drilling, completion and tie-in of 18 new development wells already drilled, plus the completion and tie-in of 5 existing exploration-delineation wells, in addition to further wells to be drilled beyond first gas. This will ensure the targeted sales gas plateau rate.

Background Reggane Nord project

Field development in the Algerian Sahara is being carried out by the joint company “Groupement Reggane Nord” (GRN), which has been established by the project partners especially for this purpose. The Groupement Reggane-Nord (GRN) partners are Repsol (29.25%) as licence operator, DEA Deutsche Erdoel AG with its 19.5%-share, Algeria’s state hydrocarbon company enterprise Sonatrach (40%), and Edison (11.25%). Reggane Nord is located in the Reggane basin of the Algerian Sahara desert.

Exploration activities started in 2002. The Field Development Plan was approved on 30 November 2011, followed by the foundation of the Groupement Reggane Nord and the start of field development in 2012. The Reggane Nord project comprises of six dry gas fields of Reggane, Azrafil Sud-Est, Kahlouche, Kahlouche Sud, Tiouliline and Sali.

The scope to first gas included design, construction, commissioning and start-up of the Central Processing Facilities (CPF) including a Gas Treatment Plant (GTP), a gathering network (flowlines, trunklines, manifolds) to connect the wells to the GTP, a Gas export pipeline (approx. 74 km) from the GTP to the new built GR5 national gas transport pipeline as well as a Living Base and Security Camp.
The production phase of the project is expected to span about 25 years.


ENI Pools $4.7Billion From Seven Lenders For Coral South FLNG

Italian giant ENI and its partners have pooled $4.675Billion worth of debt facility from seven lenders for the Coral South FLNG development, offshore Mozambique.

In the company’s announcement regarding the project’s financial close, Africa’s most aggressive hydrocarbon explorer lists five export/import credit agencies as participants in “covered loans”.

ENI and Co are also taking two direct loans, one each from an unnamed Commercial Bank and the Korea Export Import Agency (KEXIM).

ENI reports that the total amount of debt is split in the following facilities:

• France owned BPI Export Credit Agency -Covered Loan
• Korea Eximbank (KEXIM), the official export credit agency of South Korea-Covered Loan
Italian Export Credit Agency(SACE)-Covered Loan
• Korea Trade Insurance Corporation (K-sure)-Covered Loan
• China Export and Credit Insurance Corporation (Sinosure) -Covered Loan
• Commercial Bank Direct Loan (Unnamed Bank/s)
• KEXIM Direct Loan

Coral South FLNG, located in Area 4, in deepwater Rovuma Basin, is the first project sanctioned by the Block’s Partners for development.

It targets the production and monetization of the gas contained in the southern part of the Coral gas reservoir, by means of a floating LNG plant with a capacity of 3.4 MTPA. A Sale and Purchase Agreement was signed in 2016 for the sale of 100% of the LNG production to BP.

ENI is the Operator of Area 4, holding a 50% indirect interest through its participation in ENI East Africa (EEA). In March 2017, ENI and ExxonMobil signed a Sale and Purchase Agreement to enable ExxonMobil to acquire a 25% interest in Area 4, through EEA.

The remaining interests in Area 4 are held by CNODC (20%), Empresa Nacional de Hidrocarbonetos E.P. (ENH, 10%), Kogas (10%) and Galp Energia (10%).


FID Dates Slip Again For ANOH and Fortuna

By Fred Akanni, in Malabo

London listed juniors: Seplat Petroleum and Ophir Energy, have again slipped in their proposed dates for final investment decisions (FID) on their respective gas monetisation projects.

They had both declared the end of the first half of 2017 as target date, missed that timeline and now they are both saying that First Quarter 2018 is more likely.

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