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We Must Support Mozambique Overcome Terrorist Forces, Protect Lives, and Restore Hope 

By NJ Ayuk, njayuk.com

 

 

 

 

 

 

 

 

 

“You may kill me with your hatefulness, but still, like air, I’ll rise”. Maya Angelou was so right. These profound words do ring true today when we look at the recent coward attacks by terrorists against defenseless Mozambicans. There’s so much at stake in Mozambique, where the separatist militia known as Haul Sunnah Wa-Jamo (ASWJ) has stepped up its campaign to seize territory in Cabo Delgado, the country’s northernmost province.

On March 24, 2021, more than 100 ASWJ fighters attacked Palma, a town in Cabo Delgado, from three sides. Mozambique’s Defense and Security Forces, known locally as SDS, moved in quickly and mounted a counter-attack the next day, but they were not able to regain control immediately.

They also did not arrive in time to prevent Palma’s residents from violence and death. As of the time of this writing, the number of exact casualties is still unknown, but credible sources have reported that there are dead bodies on the streets of the town — and that some of the corpses have been beheaded.

High-Stakes Conflict

Mozambique’s government has strong incentives to push back against ASWJ, which has been staging deadly attacks in Cabo Delgado since 2017.

From a diplomatic and political standpoint, it is keen to preserve the territorial integrity of the country and quash the threat to the central government’s authority. (This is a sensitive issue, since many residents of Cabo Delgado feel marginalized and ignored by the government, even if they don’t view ASWJ as a viable alternative.)

From a geopolitical standpoint, it is intent on prevailing against a group that is serving as the local arm of the Islamic State, also known as Daesh. It’s not interested in letting the country become a haven for terrorism. And yes, this is terrorism – not fighting, not unrest, but terror. Sometimes we in the energy industry have to call it for what it is, no matter how careful we may want to be.

Mozambican leaders understand very well that launching a counterinsurgency push in Cabo Delgado against these extremists will not just defeat the tiny and desperate bands of armed terrorist. Instead, if experience in the rest of the world is any guide, it could transform these zeros into heroes.  It will embolden them and strengthen their resolve. And it will enable them to excel in their favorite role, that of persecuted martyr. We must win them over with carrots and sticks and transform communities. Pretty smart thinking. They want to do this right and they want results and still keep the country together. We should support them.

From an economic standpoint, it is determined to eliminate obstacles to the development of the huge natural gas fields that lie off the coast of Cabo Delgado. These gas reserves have already attracted more than $50Billion worth of investment commitments from consortia led by major international oil companies (IOCs) such as France’s TOTAL, Italy’s ENI, and U.S.-based ExxonMobil. TOTAL and its partners have already devoted a great deal of time, effort, and money to the establishment of an onshore base and liquefied natural gas (LNG) plant on the Afungi Peninsula.

This complex, which is just a few kilometers away from Palma, will support upstream development work at the offshore block known as Area 1. It isn’t yet complete, though. If it can’t be finished, TOTAL will have a hard time proceeding with its $20Billion Mozambique LNG project — and ENI and ExxonMobil will have a hard time following suit with their own South Coral LNG and Rovuma LNG projects. This is a real threat, given that TOTAL had to suspend work and evacuate workers from the construction site in January, following a series of attacks near Palma in December. Indeed, it’s worth noting that the attack on Palma occurred shortly after reports emerged that TOTAL was preparing to bring workers back before the end of March.

Terrorism and Human Suffering

But the threat to Mozambique isn’t just about gas. It isn’t just about money or security or power or territorial integrity.

It’s also about people. Human beings.

The conflict in Cabo Delgado is wrecking people’s lives on a vast scale. More than 700,000 people have already fled their homes in northern Mozambique, and the count is still rising. UNHCR, the United Nations’ refugee agency, says the number could top 1 Million by the middle of the year if the international community does not take steps to end the conflict.

Thanks to the support and encouragement from President Filipe Nyusi, his government and the governor of Cabo Delgado. I went to Cabo Delgado. The President and Mozambican officials ensured my delegation had complete and unfettered access to the region. Even during the attacks, I still had a team in Cabo Delgado. I’ve seen this suffering firsthand. I paid a visit to a refugee camp in the region. I talked to people who have been hurt, who have seen their family members slaughtered by ASWJ fighters. I met children, some of them as young as 8 or 9 years old, who have been assaulted by terrorists.

And these traumatized souls are living in makeshift, flimsy facilities that are basically made of leaves!

I’m heartbroken and outraged. I’d like to say I’m hopeful that things will change soon, but the UNHCR’s forecast of an increase in the number of refugees over the next few months gives me pause. (It’s also sobering to hear that the UNHCR has only been able to raise 5% of the $254Million in funding that it sought for its work in Mozambique last November.)

Cabo Delgado Needs More Than Security

I’m not trying to give the impression that nothing is being done for Cabo Delgado and its people. That would not be fair or accurate.

With respect to security, Maputo has pledged to work with TOTAL to establish a safe zone around the gas complex on the Afungi Peninsula. It will have to step up its efforts on this front, given that the attack on Palma occurred inside the perimeter of the designated zone, but it is seeking help. Also, earlier this month, Mozambique’s government invited U.S. military advisors and special forces into the country to deliver counter-terrorism training. It has also accepted an offer from Portugal, its former colonial ruler, to provide additional training for the Mozambican armed forces.

But this isn’t going to be enough.

Even though Mozambique’s government is committed to doing everything it can to bring real peace and stability to Cabo Delgado, it needs more support than it is currently getting. It will need ongoing support from the international community — not just in response to the most recent attacks, but for the long haul.

If it doesn’t get that, ASWJ will continue to wreak havoc and force people out of their homes, making terrorism the biggest cause of poverty in Mozambique. If there isn’t enough help — and if large-scale projects like Mozambique LNG no longer are an option to create jobs and grow the economy — the country will sink further into despair. Cabo Delgado’s people will feel even more marginalized. The country’s natural environment will continue to suffer damage, and there will be no one available to help.

Doing More — And Doing Better

So now more than ever, we have to find ways to combat terror in Cabo Delgado.

There has been talk about negotiations and giving amnesty to ASWJ members who give up the fight. And as I’ve already mentioned, there are plans to provide training and advisory services to Mozambique’s armed forces.

But we have to do more, and we have to do better — not just the international community, but all of us, as individuals and business leaders.

We can start by denouncing the evil that we’re seeing in Mozambique. We must condemn the assaults and the crimes that are being committed by the terrorists who seek to gain control of Cabo Delgado. We can’t just remain quiet, as if nothing consequential is happening there. We must give President Nyusi the necessary support and backing to fix this.

Right now, more than ever, the country needs our support and our voices, and our involvement. “Leaving behind nights of terror and fear, I rise. Into a daybreak that’s wondrously clear, I rise”. Concluded Maya Angelou. Energy workers, Palma, Cabo Delgado and Mozambique will rise out of this like the African sun rises every day.

NJ Ayuk is chairman of the African Energy Chamber.

 

 


America Joins the Fight Against the Jihadists Obstructing Mozambique’s LNG Project

With $4Billion loan committed by the US Exim Bank to the TOTAL led LNG project in Mozambique, and ExxonMobil’s involvement in a separate project, it had long been anticipated that the US would show serious interest in the violent assault of the Islamist insurgents close to sites of the proposed LNG plants in the north of the country.

Now the US Special Operations Forces have begun training Mozambican marines as part of efforts to combat the jihadists’ insurgency.

The U.S. Embassy in Mozambique announced the two-month training programme, called Joint Combined Exchange Training, describing it as an initiative which “reflects a new U.S. commitment against the jihadist organization Ansar al-Sunnah, which is active in the gas-rich Cabo Delgado province”.

On March 11, 2021, Washington officially added Ansar al-Sunnah to its list of terrorist organizations. The U.S. State Department said the insurgent group, which it renamed ISIS Mozambique, is closely linked to the global leadership of the Islamic State.

The embassy statement says that the “United States prioritizes the respect for human rights, protection of civilians, and engagement with civil society in all security assistance. The United States is committed to supporting Mozambique with a multifaceted and holistic approach to counter and prevent the spread of terrorism and violent extremism.  This approach addresses socioeconomic development issues as well as the security situation.  Civilian protection, human rights, and community engagement are central to U.S. cooperation and are foundational to effectively counter the Islamic State in Mozambique”.

Violence in Cabo Delgado has, since 2017, resulted in 2,500 deaths and forced 670,000 people to flee their homes. According to the United Nations, about 1.3 million people need humanitarian assistance.

 


Egypt’s Damietta LNG Partners Finalise Agreement

Italian player ENI says it has closed the agreement signed last December with the Arab Republic of Egypt (ARE), the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS) and the Spanish company Naturgy that will restart the Damietta liquefaction plant in Egypt, settle Union Fenosa Gas and SEGAS’s outstanding disputes with EGAS and ARE, and effect a corporate restructuring of Union Fenosa Gas, whose assets have been divided between ENI and Naturgy, as well as of SEGAS which will now be owned 50 percent by ENI, 40 percent by EGAS and 10 percent by EGPC.

The liquefaction plant, owned by SEGAS, with a capacity of 266Billion cubic feet per year, which has been idle since November 2012, has resumed production.

The first LNG cargo was carried out on February 22, followed by a second cargo on March 4, while a third, which is being loaded at the facility, will be sold directly by ENI to its customers in Europe.

The purchase of Egyptian LNG consolidates ENI’s integrated development strategy by increasing the volumes and flexibility of its portfolio, in synergy with its upstream assets.

Through this agreement, the company strengthens its presence in the East Mediterranean, a key region for the supply of natural gas, which is a fundamental resource for the energy transition, of which Egypt is the main producer in the area.

As for Union Fenosa Gas’ activities outside Egypt, ENI will take over the natural gas marketing activities in Spain, strengthening its presence in the European gas market.

The agreement comes at an important time when, thanks in part to the rapid entry into production of ENI’s recent natural gas discoveries, especially from the Zohr and Nooros fields, Egypt has regained full capacity to meet domestic gas demand and can allocate excess production for export through LNG facilities.

 


Shell Says LNG Demand Will Keep Rising for 20 Years

Overall, global LNG demand is estimated to hit 700 million tonnes by 2040, Shell has declared.

“Asia is expected to drive nearly 75% of this growth as domestic gas production declines and LNG substitutes higher emission energy sources, tackling air quality concerns and meeting emissions targets”, the AngloDutch major says in a new report., which also indicated that the demand for LNG had held steady in 2020, despite COVID-19.

The report projects a strong Asian demand, giving an example of China’s heavy-duty transport sector which “consumed nearly 13Million Tonnes of LNG in 2020, almost doubling from 2018, to serve the fast-growing fleet of well over 500,000 LNG-fuelled trucks and buses’.

Shell’s LNG Outlook 2021 www.shell.com/lngoutlook reports that LNG-fuelled shipping is also growing, “with the number of vessels expected to more than double and global LNG bunkering vessels set to reach 45 by 2023.

“As demand grows, a supply-demand gap is expected to open in the middle of the current decade with less new production coming on-stream than previously projected. Just 3Million Tonnes in new LNG production capacity was announced in 2020, down from an expected 60Million Tonnes”, the report testifies.

“According to estimates, more than half of future LNG demand will come from countries with net-zero emissions targets. The LNG industry will need to innovate at every stage of the value chain to lower emissions and play a key role in powering hard-to-abate sectors”, Shell notes.

 


Sasol takes FID on $760Million Moza to SA Gas Export Project

 By IsiZulu S’thembi

South Africa’s synfuel giant Sasol has announced its final investment decision (FID) on a $760Million gas project in Mozambique, that will provide additional supply to South Africa in the short term.

The company´s Board approved the FID on the development of the Mozambique production sharing agreement (PSA) license area, in the onshore Pande Temane region, which entails an increase in the company’s export of gas to South Africa, as well as  in-country monetisation of gas in Mozambique through a 450 megawatt gas-fired power plant and a liquefied petroleum gas (LPG) facility in the same time frame.

“The PSA development underpins Sasol’s gas transformation strategy by securing additional gas supply from southern Mozambique into Sasol’s gas value chain starting 2024 and serves as a cornerstone in addressing Sasol’s sustainability agenda”, the company said.

Fleetwood Grobler, Sasol’s CEO, said the Mozambique project would provide “additional short-term gas supply to South Africa”.

There may be up to 1.2Trillion cubic feet of gas and 10 Million barrels of crude oil in the PSA licence Sasol estimates. Sasol plans to export the crude.

Sasol is also considering LNG and supplies from (Mozambique’s northern)Rovuma Basin, in addition to exploration in Pande Temane. In the next couple of years we will set out steps towards the energy transition, it’s going to involve gas and renewables,” Sasol says.


Technip Gets the Contract for Subsea for Energean’s 90MMscf/d Development

AbuQir Petroleum, a Joint Venture between Energean and Egypt’s state oil company EGPC, has signed an integrated EPCI iEPCI™ contract to TechnipFMC for a subsea tie-back located offshore Egypt.

The contract covers the Engineering, Procurement, Construction, and Installation of four subsea wells as well as the subsea tie-back to the existing AbuQir Petroleum infrastructure and processing plant. The development wells will be drilled in a water depth between 60 and 90 meters. Three of them will be located in North El Amriya (NEA) concession, operated by Petroamriya JV between Energean and (state gas company) EGAS, and one in North Idku (NI), the concession operated by Nipetco JV between Energean and EGPC.

The NEA concession contains two discovered and appraised gas fields (Yazzi and Python) while the NI concession contains four discovered gas fields, one of which is ready for development. The integrated project NEA/NI is due to deliver first gas in 2H 2022 with 49 million boe of 2P reserves, 87% of which is gas, and peak production is expected to be approximately 90 MMscf/d plus 1 kbbl/d of condensates.


Accugas Agrees to Supply 2.5MMscf/d of Gas to Mansour Group

By Foluso Ogunsan

Nigerian natural gas supplier Accugas has entered into a new gas sales agreement (GSA) with Mulak Energy Limited.

Accugas is a subsidiary of Savannah Energy PLC, the British independent.

The GSA is initially for a seven-year term. It envisages the supply of gas produced by Savannah’s majority-owned Uquo field for an initial two-year period on an interruptible basis (the “Interruptible Gas Delivery Period”) and the subsequent five years on a firm contract basis (the “Firm Delivery Period”). During the Interruptible Gas Delivery Period, Mulak is able to nominate a maximum daily quantity of up to 2.5 MMscf/d (MMscf/d means Million standard cubic feet of gas per day).

Volumes in the Firm Delivery Period will be agreed by the parties before the end of the Interruptible Gas Delivery Period.

The GSA is priced to reflect Mulak’s status as an industrial customer; Accugas, therefore, expects to see its weighted average gas sales price realisation increase as a result of this contract, without the need for any incremental capital expenditure beyond our previously announced plans.

Sales under the GSA benefit from a bank guarantee arrangement from an investment grade credit rated international bank.

Mulak is a member of the Mansour Group, an Egyptian multinational conglomerate which claims operations in more than 100 countries and annual revenues exceeding $7.5Billion.

Mulak says it initially plans to distribute CNG to its industrial customers in Rivers State with the CNG to be substituted for diesel in generators supplied by the Mantrac Group, also a member of the Mansour Group and one of the world’s largest dealers in Caterpillar machinery, power systems and equipment.

“Mulak is in a unique position to exploit the synergies with Mantrac’s business in Nigeria through the conversion of Mantrac’s existing customer base of approximately 400MW of diesel-fuelled generators to CNG-fuelled generators”, Accugas says in a release. “Sales under the GSA are expected to commence in 2022 and, following the initial two-year period, Mulak has indicated that it is seeking to expand its CNG sales on a pan-Nigeria basis to Mantrac customers”.

 

 


New Debt Arrangement Completes the $680Million Financing of the ANOH Project

The ANOH Gas Processing Company (AGPC), has successfully raised $260Million in debt to fund completion of its ANOH Gas Processing Plant.

The 300 Million standard cubic feet per day (300MMscfd) capacity ANOH plant, located on OML 53 in Imo State, is being built by AGPC, which is an IJV owned equally between Seplat-the dual listed company on the London and Nigerian stock exchanges, and the Nigerian Gas Company (NGC), a wholly owned subsidiary of Nigerian National Petroleum Corporation (“NNPC”).

Seplat and NGC have previously provided a combined $420Million in equity funding and the project is now fully funded.

The $260Million funding was provided by a consortium of seven banks: Stanbic IBTC Bank Plc (advisor), United Bank for Africa Plc, Zenith Bank Plc, FirstRand Bank Limited (London Branch) / RMB Nigeria Limited, The Mauritius Commercial Bank Limited, Union Bank of Nigeria Plc and FCMB Capital Markets Limited. It allows for an additional $60Million accordion at the time of completion to fund an equity rebalancing payment at that time, if considered appropriate. Funding commitments of more than $450Million were received by the company, which is a significant oversubscription and a strong sign of confidence in the project.

Following a cost optimisation programme, the AGPC construction cost is now expected to be no more than $650Million, inclusive of financing costs and taxes, significantly lower than the original projected cost of $700Million.

ANOH is one of Nigeria’s most strategic gas projects. It will help Nigeria to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation.

Seplat is a leading provider of natural gas to Nigeria’s power sector, supplying around 30% of gas used for electricity generation.

 

 

 


Energean to Top Up Egypt’s Gas Output with 90MMscf/d

By Toyin Akinosho

Energean’s Final Investment Decision on the NEA/NI project in Egypt, calls for a $235Million spend to deliver natural gas at 90Million standard cubic feet per day at peak.

TechnipFMC has been awarded the EPIC contract to deliver the project.

Energean Plc is a London listed firm with focus on the Mediterranean.

NEA/NI refers to North El Amriya and North Idku concessions, which are, though not contiguous, being jointly developed.  The project is a shallow offshore subsea tieback.

The NEA concession contains two discovered and appraised gas fields (Yazzi and Python) while the NI concession contains four discovered gas fields, one of which is readied for development.

NEA/NI, with 49Million Barrels of Oil Equivalent (BOE) of 2P reserves, 87% of which is gas, is due to deliver first gas in the second half of 2022. Some 1,000Barrels per day of condensate will also be produced.

“When Brent prices are above $40/bbl, gas will be sold at $4.6/MMBTU, which is the highest achieved to date for shallow water gas production, offshore Egypt”, Energean says in a statement.

 


Savannah Inks Revised Gas Sales Agreement with Lafarge

New deal comes with a price of $7.5 per thousand cubic feet of gas

Savannah’s Accugas subsidiary has entered into a revised Gas Sales Agreement GSA with Lafarge Africa for the supply of gas to its Mfamosing cement plant in Cross River State, Nigeria.

The company says the new deal “establishes a more sustainable long-term contractual position for the benefit of both parties”.

The revised GSA sees the contract term with Lafarge extended for a further five years to January 2037, giving a remaining contract life of 17 years.  The new agreement also allows for an increase in the gas sales price from 2027, with additional US-Consumer Price Index indexation from 1 January 2029.

The revised GSA has a reduction in the daily contracted quantity (DCQ) of gas from 38.7 MMscf/d to 24.2 MMscf/d. This reduction in the DCQ will allow Accugas to release approximately 12 MMscf/d of currently reserved gas processing capacity at its Central Processing Facility (CPF), enabling Accugas to enter into additional long-term GSAs for these volumes, which will increase the business’ future revenues and cashflow potential.

To compensate Accugas for this reduction in DCQ, the revised GSA includes an advance payment of $20Million and a prepayment structure over the period to 2027, which effectively results in a gas price of $7.50/Mscf on take-or-pay volumes during this period.  “This revised structure also allows Lafarge to utilise its accumulated make-up gas balance of approximately $58Million, whilst we have preserved the capacity to supply higher volumes when these are required by Lafarge”, Savannah says in a statement. “Lafarge’s commitments under the revised GSA will continue to be guaranteed by an international investment grade bank guarantee.

“Overall, the revised terms are expected to have a cumulative positive impact on Accugas’ cash flows over the short and medium term. Following the agreement, Accugas’ aggregate maintenance-adjusted take or pay volume will reduce from 141.4 MMscf/d to 131.8 MMscf/d.

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