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Morocco’s Domestic Gas Market Can Absorb Anchois Field Development

Chariot Oil and Gas has determined that the development of the Anchois Field is technically feasible.

The potential is there “for either a single phase or a staged development to commercially optimise access to different parts of the Moroccan gas market”, the company reports, after a quick look evaluation, adding: “Morocco has a growing energy market with attractive gas prices that underpins a commercially attractive project”.

The Anchois field was discovered 10 years ago by Repsol and it has lain fallow since then. In March 2019, Moroccan authorities awarded Chariot O&G a 75% interest and operatorship of the Lixus Offshore Licence, which hosts the Anchois field. Chariot’s parner on the acreage is the state hydrocarbon company Office National des Hydrocarbures et des Mines (ONHYM), which holds a 25% carried interest.

The Moroccan gas market has considerable headroom to grow. The average price of gas is entirely deregulated and it is about $9.00 per thousand cubic feet (Mcf). This price is based on alternative supply which is imported compressed natural gas or “bottled gas” at $18.00/Mcf. Natural Gas is sold directly to local industrial users (mainly ceramic manufacturers) and local gas demand significantly outstrips supply

Chariot says that options for the development of the Anchois field include a “subsea-to-shore” concept, employing proven industry standard technical solutions and equipment. This concept consists of subsea production wells tied to a subsea manifold, from which a subsea flowline and umbilical connect the field to an onshore Central Processing Facility, where gas is processed and then delivered into the Maghreb-Europe Gas pipeline via an onshore gas flowline.

The company has initiated an Environmental Impact Assessment to facilitate appraisal operations in 2020·   Chariot says it is willing to re-enter the suspended Anchois-1 gas discovery well, “which may be completed as a producer well”.

 

 

 


Ghana Gas Still Doesn’t Pay What It Owes

By Prospectus Mojiddo

Ghana National Gas Company (Ghana Gas) is owing Ghana National Petroleum Corporation close to $1Billion, being cost of raw gas it has received from the state hydrocarbon company without paying the latter.

Between January and June 2018, Ghana Gas sold processed gas with total invoice value of $160,648,513.18. This amount comprised expected revenue from the sale of Lean Gas ($ 137,248,841.58), representing 86% percent, expected revenue from LPG, $19,723,641.34 (12%) and condensates, $3,676,030.26 (2%), according to a report by the Public Interest Accountability Committee PIAC, on the management of Petroleum Revenues in Ghana.

Even though Ghana Gas received $46,342,944.10 as proceeds from gas revenues, it made no payment to Ghana National Petroleum Corporation (GNPC) in respect of gas supplied, for which reason no gas receipts were realised in the Petroleum Holding Fund, PHF.

Ghana Gas explained to the PIAC that it used the realised revenues to cover its operational cost.

In the event, Ghana Gas’ indebtedness to GNPC stood at $45,170,192.14, between January 1 and June 30, 2018, with an outstanding opening balance of $230,315,198.37, bringing the total indebtedness to $275,485,390.51.

Cumulatively, receivables due Ghana Gas as at June 2018 stood at $873,767,914.87 (including interest charges for the period January to June 2018).

PIAC advises that Ghana Gas must discontinue the practice of retaining gas revenues. Receipts from the sale of gas must be applied to defray the cost of raw gas supplied by GNPC, for lodgement in the PHF in accordance with Sections 2 & 3 of the PRMA.

This article was published in the March 2019 edition of the Africa Oil+Gas Report

 

 


Power Crisis: Tariff Escalation Will Plug Leakages from the Nigerian Treasury

By Akpelu Paul Kelechi

The Nigerian treasury is haemorrhaging money because of the unwillingness of government to allow tariff escalation in the power sector.

The government has been pumping money in form of intervention funds. ”We are not allowing the tariff to be escalated as was agreed at the point in time when there was privatization”, says Audrey Joe-Ezigbo, President of the Nigerian Gas Association (NGA).

In November 2013, Nigeria finalised the privatisation of five electricity generation companies and 11 electricity distribution companies, which had been earlier unbundled from the state owned monopoly, the Power Holding Corporation of Nigeria (PHCN). The state however retained control of the transmission company.

Joe-Ezigbo is concerned that the illiquid state of the Nigerian power sector derives largely from its responsibility for the offtake of over 70%-80% of the natural gas supplied into the domestic market. “We have had several government interventions over the years; we have had some 238Billion ($660Million) intervention at some point, we’ve had a 90Billion ($248Million) intervention and more recently, we have had the 701Billion ($1.9Billion) intervention from the Payment Assurance Guarantee which elapsed in December last year”, she reminds Africa Oil+Gas Report in an exclusive interview.

“We currently have an approval in principle for another 600Billion ($1.66Billion) power sector intervention and this is to deal with debts that have accumulated from 2017, 2018 to current year. But, there are still constraints around the pre-2017 debts that have not been dealt with”, Joe-Ezigbo says.

“There is the concern around the tariffing; we are not allowing the tariff to be escalated as was agreed at the point in time when there was privatization. So, the end user is not paying the true cost of power and rather than shift the true cost of power the government is spending billions of naira having all these interventions that otherwise will not be necessary if it was dealt with”.

There is also the challenge of the sanctity of contract, Joe-Ezigbo, who runs Falcon Corporation, a gas pipeline operating company, points out. “So we have for instance, several Gas Sales Agreements (GSAs) and Gas Sale Aggregation Agreements (GSAAs) that six years after they were agreed upon, have actually not been signed!

“People are literarily operating without valid contracts. Now the problem with that also is that when your primary off-taker is a government power plant for instance, you find it difficult to enforce because you cannot actually enforce something you did not sign in the first place. So, it has been a sort of difficult terrain for the operators in that space”.

The full interview is published in the June 2019 edition of the Africa Oil+Gas Report

 


Mozambique Approves the Rovuma LNG Development Plan

  • Plan details proposed design and construction of two liquefied natural gas trains, which will together produce more than 15Million tons of LNG per year
  • Final investment decision expected later this year

The government of Mozambique has approved the development plan for the Rovuma LNG project, which will produce, liquefy and market natural gas from three reservoirs of the Mamba complex located in the Area 4 block in the Rovuma basin, two of which straddle the boundary with neighboring Area 1.

This is the project that will come after the Anadarko led Mozambique LNG project.

While the 12.8MMTPA Mozambique LNG Project will take FID in June 2019, the 15.2MMTPA Rovuma LNG Project is expected to be sanctioned by the 3rd Quarter of the year.

The development plan approval of the Rovuma LNG project “marks another significant step toward a final investment decision later this year,” says Liam Mallon, president of ExxonMobil Upstream Oil & Gas Company. “The Rovuma LNG project will work to build the local workforce through focused recruitment and skills development”, he adds.

Ernesto Elias Max Tonela, Mozambique’s Minister of Mineral Resources and Energy, says: “This is the third development plan approved in this five-year period to enable the sustainable development of the huge natural gas reserves discovered in the Rovuma Basin and represents the Government’s commitment to ensure the implementation of projects that will drive the development of Mozambique.”

“We want Mozambican entrepreneurs and Mozambicans to be the main beneficiaries of the various business opportunities made available by the multinationals, because we believe that these companies should grow with the national businesses and with Mozambique,” Tonela explains.

The marketing effort for the LNG produced from the Rovuma LNG project is jointly led by ENI and ExxonMobil. Sales and purchase agreements for 100% of the LNG capacity for trains 1 and 2, which together will produce more than 15 million tons of LNG per annum, have been submitted to the government of Mozambique for approval.

“The expected production from the Area 4 block will generate substantial benefits for Mozambique and the Area 4 partners,” contends Alessandro Puliti, ENI’s Chief Development, Operations & Technology Officer. “The development plan details our commitment to train, build and employ a local workforce and make gas available in support of Mozambique’s industrialization.”

The Rovuma LNG partners have developed a series of plans to support community development in line with the government’s priorities. During the production phase, the Rovuma LNG project expects to provide up to 17,000 tons of liquefied petroleum gas (LPG) per annum in Mozambique from Area 4 resources, which is currently about 50 percent of the country’s LPG imports, and will dramatically improve access to energy. The Area 4 partners also plan to distribute up to 5,000 LPG burners and cooking stoves in the Afungi area to replace the burning of wood.

Area 4 is operated by Mozambique Rovuma Venture S.p.A. (MRV), an incorporated joint venture owned by ENI, ExxonMobil and CNPC, which holds a 70 percent interest in the Area 4 exploration and production concession contract. Galp, KOGAS and Empresa Nacional de Hidrocarbonetos E.P. each hold a 10 percent interest.

ENI Rovuma Basin will lead construction and operation of upstream facilities on behalf of MRV and ExxonMobil Moçambique Limitada will lead construction and operation of natural gas liquefaction and related facilities.

 


It is Official: Anadarko Takes FID on Moza LNG In June

By Angus Djibouti

The President of Mozambique and the Chairman and CEO Anadarko Petroleum Corporation have announced plans for Mozambique LNG to make an important announcement during a celebratory event on June 18, 2019 in Maputo.

Africa Oil+Gas Report had reported, last February, that the Final Investment Decision for the Anadarko led 12.8Million Tons Per Annum (Two Train) LNG project in the country, would be taken at the end of March 2019.
That date was delayed and the news that broke around Anadarko, in April 2019, centred on its being purchased by either Chevron or Occidental, both American E&P companies like itself.

Now the project is going ahead.

President Filipe Nyusi and Anadarko CEO Al Walker have jointly noted that all issues under negotiation between the Government of Mozambique and Anadarko have been satisfactorily resolved.

“We expect June 18 will become a historic day in Mozambique as we announce that one of the most important and transformational projects in our country’s history is ready to advance to the next stage,” says President Nyusi. “We recognize Anadarko’s continued commitment to moving this project forward to becoming a reality.”

“With commitments for financing in place, off-take secured, and all other issues under negotiation successfully addressed, we are excited to take the next step with the expected announcement of a Final Investment Decision (FID) for the Mozambique LNG project on June 18,” said Walker.

“Mozambique LNG is among the most significant projects that our company or any other has undertaken, given the scale of the project, size of the resource, and the potential long-term transformational benefits it represents for Mozambique. We are grateful for the continued support of the people and government of Mozambique, our co-venturers, and the thousands of men and women working in the Cabo Delgado region to develop this exciting project. We look forward to celebrating the official sanctioning of Mozambique LNG on June 18.”


‘Job Explosion’ Expected at Train 7, ‘Banked on Nigerian Content Plan’

The construction stage of the Train 7 of the Nigerian Liquefied Natural Gas is anticipated to provide over 10,000 jobs  and “stimulate capacity building of local industries along the LNG value chain”, according to Tony Attah, CEO NLNG Ltd.

Simbi Wabote, Executive Secretary National Content Development Monitoring Board (NCDMB), said “the expected job explosion from Train 7 is banked on the Nigerian Content Plan, which provides for 100% engineering of all non-cryogenic areas in-country”, adding that the “total in-country engineering man hours is set at 55%, which exceeds the minimum level stipulated in the NOGICD Act, in line with the NCDMB’s resolve to push beyond the boundary of limitations”

Attah and Wabote spoke during the signing off of the approved plan for Nigeria Content (NC) for NLNG’s Train 7 project which will ensure the delivery of value and benefits to the Nigerian economy.

The project, expected to receive financial sanction before the end of 2019,  will add 8 Million Tonnnes Per Annum(8MMTPA)  of Liquefied Natural Gas to the current capacity of 22MMTPA at the Bonny Plant in the east of the country.

NLNG is owned by four Shareholders, namely, the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (NNPC), (49%), Shell Gas B.V.  (25.6%), TOTAL Gaz Electricite Holdings France (15%), and ENI International N.A. N. V. S.àr. l (10.4%).

 

 


Tanzania: State Energy Companies Get Better At Paying For Natural Gas

By Njoroge Karoo, in Nairobi

Private producers of natural gas for Tanzania’s domestic market are applauding the state energy firms for timeous payment of their receivables.

Canada headquartered Wentworth Resources, a member of the consortium producing Mnazi Bay Concession, reports that “Monthly payments in January and February 2019 for gas sales generated from the concession in aggregate, $3.2 million net to Wentworth, have been received” (as of March 6, 2019.

Gas production from the Mnazi Bay concession reaches 80Million standard cubic feet of gas per day at peak and is supplied to state owned power plants and industrial users like Dangote Cement Plant.

“These payments are post allocation of the Tanzania Petroleum Development Corporation (“TPDC”) receivable, adjusted to reflect the Ziwani-1 exploration well and associated 3D seismic costs”.

Wentworth says that “payments were received from both TPDC and Tanzania Electric Supply Company Limited (TANESCO) and due arrears from both off-takers remain at three months, having steadily reduced during the course of 2018”.

As a result of the continued demand and sustainable payment landscape, the Company continues to meet and pay-down its debt commitments from free cash-flow in 2019 and expects to be debt free with the final payment on its single outstanding loan facility falling due in January 2020.

 


How the Mega Gas Projects Burned Holes in TPDC’s Finances

Servicing of the $1.2Billion (2.409tri/-) debt procured for the construction of gas pipelines and power plants in the country is the major cause of the three consecutive year loss by Tanzania Petroleum Development Corporation (TPDC).

Kapuulya Musomba, acting Managing Director of TPDC, says “the mega investment” made by the government to increase natural gas for electricity generation, after securing the loan from Exim Bank of China supply, is the major reason for the losses.

The fluctuation of the Tanzanian shilling against the US dollar to 2230/- per dollar in 2016 from 1600/- in 2013 is also a huge contributing factor to the increased losses, Musomba wrote in reaction to a Parliamentary report.

The projects consist of a 542 kilometre pipeline from the country’s natural gas fields in Mnazi Bay, Mtwara Region to Dares Salaam, the commercial centre. The line has the  capacity to transport 784 MMscf/d of gas to be used in the production of 3,920 MW of electricity. Also included in the project is the construction of natural gas processing plants at Madimba in Mtwara and SongoSongo Island in Lindi. Two power plants at Kinyerezi I and Kinyerezi II with power generation capacities of 150MW and 240MW, respectively, weill be fired by natural gas.

Musomba’s statement was responding to a Parliamentary Investment Committee (PIC) listing TPDC among the three loss making public institutions in the country.

The mega projects were commissioned in 2015. Musomba said it was impossible to realise profit in a short period of time since project started to operate in 2015. The books recorded $145Million (341Billion/-) loss in the first year of its operations 2015/16,.

This pushed up the loan to $72.5Million (170Billion/-) which is equivalent to 50.4% of the total loss recorded in 2016. The payment of $30.3Million (71.05Billion/-) interest on the loan, representing 21%of the total loss registered in 2016 contributed to the mounting losses.

/- is the symbol of the Tanzanian currency, the Shilling.

 


Three “Gas Monetisation” Companies Still Enjoy Nigeria’s Pioneer Incentive Status

There is no single E&P company on the list of the current beneficiaries of the Pioneer Status Incentive of the Nigerian Investment Promotion Commission (NIPC).

But the oil and gas industry is not entirely excluded.

Three companies, which either use natural gas as feedstock or convert and distribute products of natural gas, are listed among the 21 Beneficiaries of the incentive on the latest report on the NIPC website.

They include the Indorama Eleme Fertiliser, which has purportedly invested ₦360Billion on the facility for which it was granted the incentive. Indorama’s status was approved in April 2017 and it is expected to expire in March 2020. The company is located in Rivers State in the eastern Niger Delta.

PNG Gas Limited, located in Delta State, had its Pioneer Status approved in September 2017, with an August 2020 expiry date. It has purportedly invested ₦13Billion to produce and market Propane. Lagos based Power Gas Delta Innovations Limited is said to be in “gas manufacture and distribution”, according to the NIPC report. It won the Pioneer status as a result of investment worth ₦8.7Billion. The incentive approval was made in March 2018 and the expiry date is February 2021.


Anadarko Takes FID on Mozambican LNG in March 2019

By Toyin Akinosho, Publisher

Anadarko, the large American independent, will take the Final Investment Decision (FID) on its proposed, two train, 12Million Metric Tonnes Per Annum liquefied natural gas (LNG) project, in Mozambique, next month, which is March 2019.

It is official.

Omar Mitha, Chief Executive Officer of the Mozambican state hydrocarbon company ENH, gave the specific date to a correspondent of Africa Oil+Gas Report, in Lagos, Nigeria.

“That’s what we are looking at”, Mitha told us on the side-lines of the West Africa International Petroleum Exhibition and Conference (WAIPEC), held in Lagos, recently.

FID for the Anadarko led project, to monetise over 75Trillion cubic feet of natural gas in the Golf-Atinho fields in the deep-waters of the Indian Ocean, has been long in coming. “Anadarko has gone through a steep learning curve to get here”, Mitha said. The resources were first discovered in February 2010. “They (Anadarko) haven’t done this kind of project before”.

Anadarko, the first company to encounter commercial sized gas accumulations offshore East Africa, has announced four long term Sales and Purchase Agreements with clients from mostly Asia, in the last 15 months. The latest deal, announced February 15, 2019, involves the sale of 1Million Metric Tonnes a year of LNG for a term of 15 years to India’s Bharat Petroleum. The deal gives the project a total of 8.5Million Metric Tonnes of LNG sales a year in signed contracts, lifting the operator over the 8Million Tonne threshold which the company said it wanted to reach before project sanction.

Anadarko leads the LNG project in an acreage named Area 1 with a 26.5% ownership stake. Other owners include ENH with 15%; Japan’s Mitsui Group, 20%; India’s ONGC Videsh, 16%; Bharat, 10% Thailand’s PTT Exploration and Production, 8.5% and Oil India Ltd., 4%.

 

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