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Mozambique Gets Very Little of Rovuma Gas for Domestic Market

The sale of nearly 90% of the production of the Mozambique LNG project has been secured by long-term contracts for delivery to customers in Asia and Europe, according to TOTALEnergies, operator of the 13Million Metric Tonne Project.

“Part of the remaining gas is expected to be kept for the domestic market in order to contribute to the country’s economic development. The first LNG shipments are expected in 2024”, TOTALEnergies explains in a briefing.

But even if TOTALEnergies was ready to set aside more gas for the country’s domestic market, the government wasn’t exactly bullish about pushing homegrown natural gas utilization.

As the country became surer about the likelihood of Final Investment Decision (FID) for the two massive LNG projects, (28Million Tons Per Year in total), the government selected several initiatives that would benefit from the domestic gas that the LNG partners were obliged to make available to the state. But all of the project promoters have been forced on the backfoot.

The Norwegian fertilizer company Yara International, which had been given the nod to build a petrochemicals plant supplied with gas from TOTAL operated Area 1 (after development), has since left, after raising several concerns about the slow pace of regulatory discussions between it and the authorities. Even if the gas was not going to be available until the first cargo of LNG is exported, there needed to be a framework. But the government’s wholesale focus on the export has sucked out all the energy in the room.

Anglo Dutch Shell’s plan to construct a Gas to Liquid Plant with the same Cabo Delgado gas was also stalled. So, Shell has left, as has GL Africa Energy, which won the bid for a 250-MW gas-fired power station. The three projects were meant to process at least 411 Million standard cubic feet of gas a day (411MMscf/d) after the commencement of the LNG production, with job opportunities.


TOTALEnergies May Return to Mozambique Gas Site by Mid 2022

TOTALEnergies is mulling the possibility of returning to construction site on the massive gas project in Mozambique by the first half of 2022.

“We are in constant discussion with them (TOTALEnergies)”, says Francesco Caio, CEO of Saipem, a key contractor on the project: a 13Million Metric Tonne Per Annum Liquefaction Plant in the north of the country. “The hypothesis, obviously depending on the evolution of the situation in the country, is that work can be resumed in the first half of next year”. 

Caio says that the project in Mozambique, which is the largest in which Saipem is currently involved, “remains in the order book as of June 30, 2021 for an amount of approximately 3.6Billion euros with a reshaping of construction times”.

TOTALEnergies declared the force majeure on the LNG Mozambique project on April 26, 2021, citing security reasons. The operator and its contractors evacuated the site.

Since then, however, the Mozambican government has boosted security by engaging the Rwandan army as well as the entire Southern Africa Development Commission, initiatives which have led to the deployment of military troops from South Africa, Botswana, Angola, and Malawi. President Fillipe Nyusi is keen on getting TOTALEnergies back to the project site on the Afungi Peninsula, for Africa’s largest ongoing gas processing plant. And despite the challenges, the French major itself has not taken the project off its radar.

“TOTALEnergies has always anticipated to us that this suspension would have lasted a minimum of 12 months”, says Maurizio Coratella, Saipem’s Chief Operating Officer of the Onshore Engineering and Construction Division. “The suspension started in the mid of April 2021. Therefore, all our numbers are reflecting a resumption of activities in the first quarter of 2022”.


With a Surging Domestic Gas Market, Ghana Defies the Sceptics

With 2020 consumption in excess of 315Million standard cubic feet per day (320MMscf/d), Ghana’s domestic gas market is growing faster than was assumed by energy experts, (mostly non-Ghanaian), just three years ago.

In 2018, it wasn’t so clear if Ghana could absorb, by 2020, the entire peak gas supply (180MMscf/d) prognosed to come from the (then) newly commissioned Sankofa field, operated by ENI.

But 165MMscf/d of Sankofa field production is already accounted for in the 2020 consumption, with Nigerian gas (coming from the West Africa Gas Pipeline) delivering over 65MMsf/d, in 2020, a figure that is still short of the contracted 123MMscf/d but is at least growing. Gas from Tullow Oil operated Jubilee field and TEN clusters of fields accounted for the rest:  around 85MMscf/d.

Ghana’s gas consumption increased from 115MMsscf/d in 2017 to 315MMscf/d in 2020.

“Gas demand in Ghana will be driven by the rise in electricity generation”, says Mike Fulwood, a senior research fellow at the Oxford Institute for Energy Studies (OEIS). “Based on a 45% increase by 2026, this would see a rise in gas demand from the 2020 level” of around 310MMscf/d to some 455MMsf/d. Fullwood says that the power plants in the Takoradi area (in Ghana’s western region) operated at a higher utilization rate in 2020 than those in the Tema area (a port town close to Accra in the east), at around 52% to 41% – for those plants fully operational. “Some of the older plants in the Takoradi area have had operational issues but the newer ones, including the Karpowership, are operating at high utilization rates and are very much baseload plants. “Over time we assume that the utilization of the Takoradi plants rises to some 60% but that any new power generation capacity is added at Tema”, Mr. Fulwood reports.

Still, while Ghana’s gas consumption is expected to keep increasing as electricity production and consumption increases, Fulwood doesn’t see the economic value in the country’s plan to import Liquefied Natural Gas (LNG). The LNG Terminal facility, already sited at Tema, received its floating regasification unit (FRU), built by Jiangnan Shipbuilding, in January 2021. The LNG FRU is designed for a regasification capacity of around 1.7Million Tonnes Per Annum (1.7MMTPA)tpa and is contracted to operate for approximately 20 years. The FRU will work in conjunction with a dedicated storage vessel (FSU), which is the newbuild 180,000cubic metres Vasant 1, and arrived at Tema port on May 26, 2021, having delivered just one cargo from Darwin in Australia to Yung An in Taiwan in February. The Vasant 1 is on a charter until July 1, 2022, and will then be replaced with an alternative FSU.

Fulwood cautions: “Ghana’s desire to import LNG is very different from other countries who are recent new LNG importers such as Malta, Gibraltar, and Myanmar. All these countries have dedicated power plants linked to the LNG imports so LNG is baseload and the economics can make sense. For Ghana, it is more diversity of supply, which is not a bad thing but can be expensive. The Vasant 1 FSU is on a charter until July 2022, reportedly at a charter rate in the low $20,000 a day– significantly below current market levels, especially given it is a new-build vessel. It is understood the lower rate is linked to the vessel’s speed limitation of 12 knots, making it less attractive on the standard market. The FRU also has to be paid for or chartered and if that was at a similar rate then a total of $50,000 a day would amount to some $18Million/year. Around 6 cargoes/year are needed to get the cost/MMBTU down to $1, which is reasonably cost-effective. At 2 cargoes/year, the effective cost is over $3/MMBTU, which is starting to make LNG look very expensive, once the commodity cost of LNG is included – currently $9 or $10 – and whatever costs are charged for the upgraded port facilities and the pipeline connections to the power plants”.


Advance Military Teams from SADC Arrive Mozambique

Advance teams from the Southern African Development Community (SADC) have arrived in Mozambique to support the battle against the Islamist terrorist groups, known locally as “Al-Shabaab”.

Colonel Omar Saranga, the Ministry’s spokesperson dismissed the news that the regional bloc’s full Standby Force, was already in the country.

The advance teams, he explained, are in Maputo and in Palma (a town in the province of Cabo Delgado), to prepare the deployment of the main force.

Saranga confirmed that General Xolani Mankayi, head of South Africa’s 43 Brigade, the rapid intervention unit of the South African National Defence Force (SANDF), will command the SADC Full Standby Force. Mankayi is already in Mozambique, “and he has been received by the Defence Minister and by the Chief of Staff of the Mozambican Armed Forces. He has received a briefing on the situation”, Saranga said. Last August, the energy press speculated that General Manyi had instructed the 43 Brigade to begin an intensive training programme for possible action in Cabo Delgado if President Cyril Ramaphosa decides to intervene. “Questions of command have been outlined in the combined planning”, Saranga offered. “Right now, what is important to say is not who will command or cease to command. The troops will be led by their respective commands, but the chief coordinator is the Republic of Mozambique”.

Islamic insurgents have killed hundreds of people and turned thousands to refugees in towns and villages located in the province and close to the Afungi Peninsula, where the TOTALEnergies operated 13 Million Metric Tonnes Per Annum Liquefied Natural Gas project is sited.

In late March 2021, just when TOTALEnergies’ workers returned to site in Afungi to continue construction, Islamic insurgents made their most sweeping attack on the neighboring Palma town.

TOTALEnergies pulled out its workers after that attack and Mozambique has since been looking for a way to permanently root out renewed attacks. Part of the effort was to call on member countries of the Southern African Development Commission (SADC) to provide military assistance.

Saranga waved aside questions regarding combat operations of Rwandan troops who arrived in the week of July 12, 2021. The questions referenced report by the independent newssheet “Carta de Mocambique, that soldiers of the Rwanda Defence Force (RDF) left their base on the Afungi Peninsula to patrol a forested area close to the town of Palma. They reportedly found a terrorist group in the Quionga administrative post, retreating towards the Tanzanian border, engaged them and killed 30 terrorists. Saranga said that questions about Rwandan forces “are operational question and I can’t answer it. It’s the force commander who can answer. The enemy may be watching our actions to see what direction we are going to take”. But he volunteered that the SADC member states who will take part in the Standby Force are South Africa, Tanzania, Angola, and Botswana, “and we are confident that, during the operations, more countries may express an interest in supporting Mozambique”.

“The SADC heads of state summit, held in Maputo on 23 June, approved a mandate for the deployment of the Standby Force”, Col. Saranga told reporters. “The objective was to support the national efforts to fight against terrorism in Cabo Delgado. Following up this mandate, in late June there was a joint planning conference, and this event outlined the next steps that should be taken to deploy the force”.

“What is happening right now is the implementation of this plan”, he continued. “The mandate envisaged that the deployment of the force should happen as from 15 July. So from 15 July to now, activities have been undertaken in order to receive this force, which is rather substantial. Steps are being taken so that it can be received and carry out its work. That means there are advance teams that are working with our troops on the ground to receive the force.


Mozambique Ready to Receive Southern African Troops in Cabo Delgado

Jaime Neto, Mozambique’s minister of National Defence, says that everything is ready to receive the troops of the Southern African Development Commission (SADC), who are expected in the country to help fight terrorism in the gas rich province of Cabo Delgado.

Islamic insurgents have killed hundreds of people and turned thousands to refugees in the towns and villages located in the province and close to the Afungi Peninsula, where the TOTALEnergies operated 13 Million Metric Tonnes Per Annum Liquefied Natural Gas project is sited.

In late March 2021, just when TOTALEnergies’ workers returned to site in Afungi to continue construction, Islamic insurgents made their most sweeping attack on the neighbouring Palma town.

“They want to intimidate us”, President Filipe Nyusi, Moazmbique’s head of state, and government said in a speech two weeks after the incident, declaring war. “Following the attack on the town of Palma, the situation in Cabo Delgado has received a lot of national and international attention. All of this attention is legitimate,” the President said. “This town and the adjacent Afungi peninsula are close to the natural gas deposits. It is in this region where the foundations for the exploitation of this resource so important to our economy are being laid. The town serves as the basis for construction works and provides logistical support for works underway in Afungi. So it is that Palma has, in recent years, experienced a rapid evolution in terms of infrastructure, including hotels, banks, and service providers. The Afungi peninsula is also the locus of various other constructions, such as camps and residential areas with access roads and its own aerodrome.”

TOTALEnergies pulled out its workers after that attack and Mozambique has since been looking for a way to permanently root out renewed attacks. Part of the effort was to call on member countries of the Southern African Development Commission (SADC) to provide military assistance.

Mr. Neto, the Defence minister, denies information about the postponement of the arrival of the regional force, due to alleged procedural issues on the part of Mozambique.

“There are already officials in Mozambique who are dealing with the arrival of this SADC intervention force”, the minister explains.

The journal Club of Mozambique quotes Neto as saying that there is no reason, from Mozambique’s point of view not to have the military intervention. “We are prepared”.


Jubilee, TEN Deliver 120MMscf/d of Gas to Ghana’s Atuabo Plant

By John Ankromah, in Tema

Tullow Oil has announced that its oilfield production performance in Ghana “continues to be supported by reliable gas offtake from the Government of Ghana”.

That offtake, from Jubilee field and the TEN cluster of fields, “is regularly averaging between 110 – 130MMscf/d”, the company says in its latest operational statement.

This is a far more upbeat news about gas production than Tullow has had in the last two years.

It suggests that the Ghanaian economy is absorbing an increasing volume of natural gas.  In late 2019, Tullow had lamented that “Gas export from both fields has been limited in 2019 due to low demand from the Ghana National Petroleum Company (GNPC)”, which is the offtaker.

“Discussions on increasing gas offtake are ongoing with GNPC with an increase anticipated towards end of 2019. Sustaining increased levels of gas offtake will reduce the amount of gas being reinjected into the fields, improving oil production over time”, the operator explained.

The gas that Tullow supplies to the Ghanaian government is delivered unprocessed from the two FPSOs (Kwame Krumah for Jubilee and John Atta Mills for TEN) through 12-inchpipelines to the Ghana National Gas Corporation (GNGC) controlled Atuabo plant, which has a processing capacity of 150MMscf/d. Processed gas is evacuated from Atuabo plant through a 20-inch 111km pipeline to (primarily) Volta River Authority’s Thermal Power Stations.


Egypt’s Bus Owners Can Apply for Natural Gas Vehicle Swap

By Toyin Akinosho

Owners of intercity and intracity buses in Egypt will be able to swap their gasoline powered minibuses for natural gas powered ones, in the first phase of the government’s natural gas vehicle swap scheme starting July, 2021.

A key requirement for this phase is that the vehicles must be older than 20 years old. The scheme will initially be rolled out in Cairo, Giza, Qalyubia, Alexandria, Suez, Port Said, and the Red Sea. 

The vehicle swap programme entails private transport companies getting brand new natural gas-powered vehicles for their old mini buses.

The government has also announced that 2,300 Public Buses (owned by governorates and municipalitities) in Cairo and Alexandria will be converted to run on natural gas at a total cost of $77Million (or EGP 1.2Billion), under a joint agreement signed between the ministries of petroleum, local development and military production as well as the public transport authorities of both cities.

Egypt’s plan to displace gasoline and diesel with natural gas, as the country’s default fuel of transportation, had initially scheduled 15,000 minibuses (Egypt’s equivalent of Kenya’s Matatus and Nigeria’s Danfos).

But outside the pulic transport system, the government has now scaled up the planed number of cars to be converted to run on natural gas by 2023, from 250,000 to 450,000 cars.

Egypt’s finance ministry is backing the effort of Taqa Arabia, the country’s largest private sector energy distribution company, in the natural gas conversion scheme. The company, last week, announced the receipt of a $58Million loan from the National Bank of Egypt to help finance the construction of natural gas filling stations. Master Gas, a subsidiary of Taqa Arabia, will use the finance to build 40 new filling stations in a number of governorates, to support the growing shift to natural gas vehicles. Taqa Arabia has indicated it would invest $231Million (or EGP 3.6Billion) in expanding its number of natural gas stations to 180 by 2023. The company says it will spend $51 (EGP 800Million) to construct 40 stations in 2021, $77Million (or EGP 1.2Billion) on 60 stations in 2022 and $102Million (or EGP 1.6Billion) on 80 stations in 2023. Taqa currently operates 23 natural gas stations.


Platform Breaks into the “Nigerian Gas Grid” System

Platform Petroleum has become a gas supplier of some reckoning in the Nigerian domestic gas market.

The marginal field operator currently supplies 22Million standard cubic feet of gas per day (22MMscf/d) to a pipeline operated by the Nigerian Gas Company (NGC).

“All of this is essentially lean gas that comes from the stripping process that is achieved by the PNG gas plant, located on the Egbeoma (marginal) field in the north-western Niger Delta, according to Osa Owieadolor, the company’s outgoing Chief Executive Officer. Platform Petroleum is the operator of that field.

That makes Platform the marginal field operator with the second highest volume of lean gas supplied to the local market. Savannah Petroleum, another marginal field operator, supplies about 100MMscf/d, processed from the Uquo marginal field to the domestic market, mainly to power plants in Calabar and Ikot Abasi, in the east of the country.

The Nigerian domestic gas market is relatively small, with the total volume (supplied to power plants, fertiliser plants and industries) coming to less than 1,500MMscf/d, so two marginal fields supplying 122MMscf/d is a big deal.

“Prior to this process, we were flaring significant volumes”, Owieadolor told Africa Oil+Gas Report. “Now we’re delivering about 1.2MM cf/d of gas to PowerGas for their CNG plant”, he explained. “We have significantly reduced our flaring by over 80%, and we should achieve a total flare-down in our field before the end of the year, because we have also commissioned a compression system that will enable us to do that”.

Platform achieved its first commercial lean gas delivery to the Nigerian Gas Marketing Company (NGMC) a subsidiary of the NGC, in November 2020, following the commissioning of a section of the OB3 gas pipeline.

“Prior to this time, we had executed a Gas Sales and Purchase Agreement with NGMC, that happened over two years ago”, Owieadolor told Africa Oil+Gas Report. “We did same with PowerGas and one or two other Third Party companies. The model has been willing buyer-willing seller”.

Oweiadolor clarified that Platform is not the current operator of the PNG Gas Processing Plant, “but we are an investor there and our involvement is more like an oversight function at the board level. But outside of that, because of the relationship on the board level, we also provide some bit of support based on our experience. That’s how it relates to the operatorship of the plant”.

 


BP Starts Up 600MMscf/d Field for Egypt’s Domestic Gas Market

British supermajor BP has commissioned the Raven gas field in Egypt’s West Nile Delta, producing 600Million standard cubic feet per day (600MMscf/d) into the country’s natural gas grid for a start.

The field produces into a new onshore processing facility, alongside the existing West Nile Delta onshore processing plant.

At its peak, Raven has the potential to produce 900MMsscf/d and 30,000 barrels per day of condensate.

 

 

Raven is the third of three projects in BP’s West Nile Delta (WND) development off the Mediterranean coast of Egypt. It follows the Taurus/Libra and Giza/Fayoum projects, which started production in 2017 and 2019 respectively.

The approximately $9Billion WND development includes five gas fields across the North Alexandria and West Mediterranean Deepwater offshore concession blocks in the Mediterranean Sea. BP and its partners, working with the Ministry of Petroleum, have developed the WND in three stages.

 Egypt is Africa’s most absorptive market for natural gas, consuming over 6Billion standard cubic feet per day (6Bscf/d), most of it in its 55,000MW electricity generation market.

Bernard Looney, BP’s chief executive, says that the WNDprojects “will make an important contribution to meeting Egypt’s growing energy needs by providing a cost-competitive and resilient gas supply from the country’s own resources.” 


TOTAL Declares Force Majeure on Mozambique LNG Project

Macson Obojemoinmien, in Lagos

French major TOTAL has declared a Force Majeure on the 12.8Million Metric Tonne Per Annum (12.8MMTA) Liquefied Natural Gas (LNG) project in Afungi, in Mozambique’s north easternmost province of Cabo Delgado.

“Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, TOTAL confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site”, the company says in a brifing released Monday, April 26, 2021. “This situation leads TOTAL, as operator of Mozambique LNG project, to declare force majeure”, the company explains.

The Cabo Delgado province has suffered debilitating attacks by Islamic insurgents. The attacks have led to deaths of dozens of people and s displacements of thousands more.

“TOTAL expresses its solidarity with the government and people of Mozambique and wishes that the actions carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stability in Cabo Delgado province in a sustained manner”, the company says.

“TOTAL E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total SE, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%)”.

 

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