All articles in the Gas Monetization Section:

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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Don’t Rule Out FID For Kudu Gas To Power in 2017

BW Offshore, the main investor in the upstream part of Namibia’s Kudu Gas To Power project, has not ruled out financial sanction for the project before the end of 2017.

The company indicated in the events guidance in its 3rd Quarter 2017 report, that Final Investment Decision for the 800MW project remains one of the several milestones on the cards for second half of the year.

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NLNG Mulls A 2018 Date for Financial Close on Train 7 Plus

Nigeria LNG Limited has declared it is making steady progress towards achieving Final Investment Decision (FID) on its Train 7 Plus (7+) project during 2018.

“This phase of the company’s strategic growth programme will on completion upscale NLNG’s annual production capacity from the current capacity of 22MMTPA (Million Metric Tonnes Per Annum) to 30MMTPA”, the company’s spokesman, Kudo Eresia-Eke, said in a release.

He was quoting Tony Attah, NNLG’s Managing Director and Chief Executive Officer, who said at the World LNG Summit holding in Portugal, on Wednesday November 29, 2017, that West Africa’s largest gas export company was looking to the project’s financial close in 2018, “with the full support of the NLNG Board.”

This would mean that the prospects for constructing the 8MMTPA capacity train has brightened since it came on the drawing board at least 12 years ago, as Natural gas grows to account for a quarter of global energy demand, becoming the second-largest fuel in the global mix after oil by 2040, according to the International Energy Agency (IEA)’s New Policies Scenario.

The current period in which this Final Investment Decision is being taken certainly has its own challenges. There is ample supply and the prices are low, but the IEA says that so long as “gas remains affordable”, its growth in the near future is assured. To NLNG’s advantage, “LNG accounts for almost 90% of the projected growth in long-distance gas trade to 2040: with few exceptions, most notably the route that opens up between Russia and China, major new pipelines struggle in a world that prizes the optionality of LNG”, the IEA says in its latest report.

“With Nigeria’s proven reserves of about 192 trillion cubic feet of natural gas, and another 600 trillion cubic feet in potential, this milestone development is coming at a crucial time. I am excited about this development which would not be possible without the support of our Board and shareholders”, Attah said at the Summit, attended by the world’s leading LNG stakeholders.

“NLNGhas so far converted over five trillion cubic feet of associated gas, which otherwise would have been flared, to liquefied natural gas (LNG) and natural gas liquids (NGLs) for both export and domestic use. It is Nigeria’s most significant natural gas utilization intervention to date, which is helping to preserve the environment and support Nigeria’s economic growth”, Attah told the audience. “From an initial investment of about $6Billion, NLNG has grown into a $15.6Billion investment with an asset base of about $11billion”, he explained. “The company has generated $90Billion in revenues as well as paid $5.5 billion in taxes to the government. The company has also has helped monetise the country’s gas resources and significantly contributed to reducing gas flaring from 65% to less than 20%,” he remarked.

NLNG runs an integrated plant on Bonny Island where its current six liquefaction trains share common facilities including storage tanks, shipping capacity and loading jetties with a gas intake of 3.5Billion standard cubic feet of natural gas per day.

All these have been achieved with a management staff entirely made up of Nigerians and a workforce which is 95% indigenous.

NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the 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%).

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