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Africa’s Largest Gas Field Threatens Even More Output

The giant Zohr cannot be reined in

The giant massif contained Zohr field in the Mediterranean offshore Egypt is threatening to surpass its 2.7Billion standard cubic feet per day mark, its handlers are saying.

Luca De Caro, head of the IEOC Joint Venture, ENI’s partnership with Egypt’s state hydrocarbon company, says the 13 wells currently producing at the field will be surpass 3Bscf/d by the end of October, up from 2.7Bscf/d in August.

ENI discovered Zohr in the Sharouk concession in 2015, on the same acreage which Shell had held for 10 years before relinquishment.

The discovery affected the fortunes of Egypt, changing the country from a net importer of natural gas to a self sufficient consumer of natural gas with aspirations to be an exporter of natural gas again.

The company originally estimated that production would peak at 2.7Bscf/d, but, in consultation with the Egyptian government, it was agreed that output would rise above 3Bscf/d in 2019.



With Gas Reserves Confirmed in Bauchi, Who Needs an AKK Pipeline?

By the Editorial Board of the Africa Oil+Gas Report

If there is truly far more substantial natural gas reserves encountered in Kolmani-2 than was found in Kolmani-1, then there is a clear basis for a valourisation project targeted at gas supply to the commercial city of Kano, the ultimate terminus of the Ajaokuta-Abuja-Kaduna-Kano pipeline, AKK.

The Anglo Dutch major Shell reported 33Billion cubic feet of gas in one zone for the Kolmani-1 discovery in 1999.

NNPC has not provided any volumetric figures for the Kolmani River-2, the appraisal well it just drilled, but its statement about the probe is quite upbeat and the company did indicate that hydrocarbon was found in several levels.

It also says that Kolmani 2 is the first of a multi-well drilling campaign.

Should Kolmani be found to hold even just 500Bcf of gas, NNPC should be ready to commence a natural gas supply study project to ferry those molecules from Bauchi to Kaduna and Kano and therefore discard the $2.8Billion, 614 km project.

Some have suggested that discarding the expensive AKK pipeline would be too wrongheaded, considering that the project is already on course.

But the least the company can do for Nigeria’s sake is start evaluating the modification of the AKK project, now that there is clearer line of sight to hydrocabons in Nigeria’s geographic and political north.

NNPC has reported it had completed negotiations with Chinese Financiers to loan it the money for the AKK project, which will pump gas from the Niger Delta to the North of the country. But paying for that project has been a point of debate.

“What NNPC has done is to look at the entire receivables from gas flows from the existing pipelines today and used that to pledge in terms of the tariff”, says Emeka Okwuosa, Chief Executive of Oilserv, one of the contractors for the project.

So, even though the AKK is being called contractor financed, the state hydrocarbon company is essentially funding it and that has implications for the treasury.

We do know that pumping hydrocarbon from any point to another in pipelines managed by the NNPC or its subsidiaries is always riddled with inefficiency. And no one has said that the AKK was going to be managed by any entity other than this highly unaccountable state hydrocarbon company.

The Escravos Lagos Pipeline System is frequently sabotaged. A looping of the line (running a parallel line in order to double the throughput), has been under construction for seven years. The cost overruns ensuing from this kind of poor project management and what it does to the national treasury receipts never show up even in the most detailed reports of the Nigeria Extractive Industry Transparency Initiative (NEITI).

If we find natural gas in the north, should we not simply structure a north- north gas project to feed power plants and industries in the north and do away with expensive, long distance pipelines, the payment for which we are not entirely certain?


The Japanese Get Rovuma LNG

Japan is not only going to consume gas produced in Mozambique but its engineers will be leading the operations to extract the gas from the Indian Ocean.

The Japanese contractor, JGC Corp. unprecedentedly won the contract to develop the Rovuma liquefied natural-gas project in Mozambique, which is set to be the biggest-ever private investment in Africa.

JGC is leading a consortium including Fluor Corp. And Technip FMC Plc to develop the Rovuma LNG project, a 15.2Million Tonnes Per Annum (MMTPA) project which is operated by ExxonMobil. The invoice for the project is around $30Billion and is the priciest hydrocarbon valourisation project on the continent in the last 10 years.

The Rovuma LNG project will develop over 60Trillion cubic feet of reserves in the deepwater Area 4 block, offshore Mozambique.

But the final investment decision, earlier planned for second quarter of 2019, has been deferred to 2020, with first gas expected on stream in 2025.


ENI Opens the Tap in Egypt’s Baltim South West

Italian explorer ENI has started up production of the offshore Baltim South West gas field in Egypt.

It is another fast discovery to market by the aggressive operator.

ENI discovered the field in June 2016 and took Final Investment Decision (FID) in January 2018. Baltim South West thus comes on stream 39 months after discovery and 19 months after FID.

The field is located in shallow waters 12 kilometres off the Mediterranean coast of Egypt in the Baltim South development lease. It lies within the Great Nooros area, some 10km from the Nooros field, an area in which ENI says it “first recognised great gas production potential and where it is conducting other new exploration projects”.

With the start-up of the first well, BSW1, the field is now producing with an initial rate of 100 million standard cubic feet per day (scf/d) from a new offshore platform connected to the existing onshore Abu Madi Gas Plant through a new 44 km long, 26 inch diameter pipeline.

The development programme anticipates the drilling of further five wells with the objective of achieving a production target of 500Million scf/d by the second quarter of 2020. Volumes produced by Baltim South West will further contribute to Egypt’s natural gas export capacity. The overall gas potential from the Great Nooros Area is approximately 3Trillion cubic feet (Tcf) of gas in place, of which about 2Tcf are in the Nooros field and the remainder in Baltim South West.

ENI has a 50% interest, through its subsidiary IEOC, while BP holds the remaining 50% interest of the contractor’s stake in the Baltim South development lease. The project is executed by Petrobel, the Operating Company jointly held by Eni and the state corporation Egyptian General Petroleum Corporation (EGPC) on behalf of Medgas, jointly held by contractor (ENI and BP) and EGPC.



Mixed Signals from Tanzania’s Domestic Natural Gas Market

By Sully Manope, East Africa Correspondent

Indonesian owned, Paris listed operator, M&P, reported a sizeable drop in natural gas production in Tanzania for first half 2019.

But Orca Exploration says it had a surge in Natural gas deliveries from the Songo Songo gas project in the same country.

Each of the two companies operates one of the two key natural gas projects that feed Tanzania’s industries, power plants and factories.

M&P operates the Mnazi Bay project, which pumps gas directly into the 532 kilometre National Natural Gas pipeline and connects Mtwara, where the Mnazi Bay gas field is located in the south eastern region of the country with the commercial capital Dar es Salaam.
Orca Exploration operates a natural gas processing facility on Songo Songo Island, off the coast of southern Tanzania.

M&P says its natural gas production (gross) dropped 17% to 66.2Million standard cubic feet per day in first half 2019, from 77MMscf/d averaged in first half of 2018. It cites “a result of the lower demand for gas because of the early and heavy rainy season, which led to a marked increase in hydropower generation capacity at the expense of gas demand”

But Orca Exploration reports its own supply shot up by 68% to 56.6Million standard cubic feet per day (MMscf/d), year to year in the second quarter of 2019.The same project had delivered 33.7 MMscf/d on average in second quarter 2018. Indeed, in the first six months of 2019, the production averaged 59.0 MMscf/d.

Orca says the surge in deliveries “is as a result of higher sales volume to Tanzanian Electricity Supply Company (TANESCO)”. Orca’s plant supplies natural gas to a 25 km 12″ offshore pipeline and a 207 km 16″ onshore pipeline and is used by the power sector and industrial markets in the Dar es Salaam area.


Zohr Makes It to The Summit

By Mohammed Jetutu, North Africa Correspondent

The largest natural gas production on the continent, from a single field

ENI has made good its pledge to deliver 2.7Billion cubic feet of natural gas per day from Zohr, the mammoth gas tank it discovered beneath the Mediterranean in 2015.

The Italian giant had climbed the hill in stages; getting the resources from discovery to market in the first phase within 30 months and then growing the output from 350Million standard cubic feet a day in 2017 to almost ten times that size in two years.

Today the output from Africa’s largest single gas field can feed an LNG Plant of 10Million Tonne Per Annum (10MMTPA).

Tarek al-Molla, Egypt;s flamboyant petroleum minister says that the 2,7MMBscf/d  was reached four months ahead of schedule, with 12 high producing wells draining the field

Whereas 2.7Bsf/d was the peak production that ENI prognosed at the beginning if the development, Mr. Molla says that there is enough in the tank to get the output to 3Bscf/d before January 2020.

Production initially increased to 800 MMscfd in early 2018, then climbed to 1.2Bsc/d in May 2018, reaching 2Bsc/d.

The Zohr field is located offshore, within the Shorouk Block, some 190 km north of Port Said.

ENI controls 50% of the project. Russia’s state contrilled Rosneft owns 30%, while BP and Mubadala Petroleum each have a 10% stake in Zohr.

The gas is off taken by government for Power Plants and Petrochemical industries in Africa’s third largest economy.

Another Liquefied Natural Gas (LNG) storage and regas plant For West Africa

The Atlantic coast on the edge of West Africa will, in the near term, be teeming with LNG regasification plants.
Equatorial Guinea just announced it was building one, , after Cote D’Ivoire and Benin Republic went to town with declarations that TOTAL, the French major would be installing those types of facility on the countries’ coasts.

A news release last week said that a storage plant, built alongside the regasification plant will enable the storage, transportation and distribution of liquefied natural gas (LNG) to Equatorial Guinea’s mainland.

The storage plant will be located at the Port of Akonikien, on the southern border of Equatorial Guinea’s mainland. “12 bullet tanks will carry 14,000 cubic meters of storage capacity, supported by a truck loading station and 12-kilometers of ten-inch gas and diesel pipelines”, the release said. “The project will be led by local construction and engineering firm Elite Construcciones; It is part of Equatorial Guinea’s regional LNG2Africa initiative which seeks to drive gas monetization through in-country gas-to-power projects.

“The plant will enable the transportation and storage of LNG from the EG LNG plant at the Punta Europa Gas Complex on Bioko Island. It will then be fed into the regasification plant to be distributed to smaller-scale power plants and LNG power stations throughout the country, as well as exported to neighboring countries”.

“The tanks are currently the largest factory-built cryogenic bullet tanks in the world with a capacity of 1,228 cubic meters and dimensions of 31 meters by 9.3 meters by 8.8 meters. Built by American manufacturer Corban Energy Group, each tank is estimated to require 12 hours to complete the 12,000-meter distance from the port to the new plant. Elite Construcciones is also installing a truck loading station and 12 kilometers of 10-inch gas and diesel pipelines”, says the report.

OTAL had earlier announced signing an agreement with Republic of Benin for the development of a Liquefied Natural Gas (LNG) import floating terminal and the supply of up to 0.5Million tonnes per annum (MMTPA) of regasified LNG from TOTAL’s global portfolio to Benin for 15 years, starting in 2021. The company said it would “develop and operate the regasification infrastructure that will comprise a floating storage and re-gasification unit (FSRU) located offshore Benin and an offshore pipeline connexion to the existing and planned power plants in Maria Gléta”.

TOTAL had, even long before then, (October 2016) announced it had been awarded the rights to build and operate a liquefied natural gas (LNG) re-gasification terminal in Cote d’Ivoire with a capacity of 3Million tons per year. That project is, however, struggling.

GNPC Finances the West to East Reverse Flow of Natural Gas In Ghana

GNPC CEO K. K . Sarpong

Ghana National Petroleum Corporation (GNPC) announces the completion of the initial phase (Takoradi scope) of the project to reverse flow gas from the Western Region of Ghana to the Tema power enclave, which is being financed by the Corporation.

The infrastructure was enabled with the support and collaboration of the Ialian explorer ENI, the crude oil trader Vitol, Ghana National Gas Company (Ghana Gas) and the West Africa Gas Pipeline Company (WAPCo). Commissioning and performance testing of the Takoradi scope of the “Takoradi – Tema Interconnection Project” (TTIP) has been successfully carried out.

“The successful execution of this scope of the project paves the way for the smooth flow of gas from the Western Region to Tema for use by the various gas offtakers in the Tema-Accra power and industrial enclave”, GNPC says in a statement.

This project has doubled the capacity of Ghana Gas to transport GNPC’s gas to feed critical national power generation facilities sited in the Western enclave. Again, gas users in the Accra-Tema region are assured of relatively more reliable gas supply through the TTIP.

The Tema section of the TTIP, which includes the revamping of WAPCo Tema Regulatory and Metering Station (RMS) is ongoing and is expected to be completed by the fourth quarter of 2019.

GNPC’s Role

As the National Gas Aggregator, GNPC played an enabler role, providing the financing and necessary comforts to the partners to ensure the successful completion of the project. GNPC engineers also provided end-to-end advice in the design and scoping, as well as monitoring of the project execution.

Implications for Ghana’s power sector

The successful completion of the project has enormous benefits for the country’s power sector.

“Ghana Gas’ ability to supply gas for a stable production of electricity means that, cost of electricity to the final consumer will now be relatively lower as compared to the use of Heavy Fuel Oil (HFO) or diesel as fuel for electricity generation”, says K. K. Sarpong,CEO of GNPC “The cost of production for local companies, especially in the manufacturing and mining sectors, will reduce significantly to enable them become more competitive. Dr.Sarpong was optimistic that, with GNPC’s drive to increase the utilization of domestic gas, the take-or-pay obligation on the country will be reduced significantly, once the power sector pays for the gas.

TOTAL will develop the LNG market in Benin

TOTAL, the Republic of Benin and the Société Béninoise d’Energie Electrique (SBEE) have signed the Gas Supply Agreement and the Host Government Agreement for the development of a Liquefied Natural Gas (LNG) import floating terminal and the supply of up to 0.5Million tonnes per annum (MMTPA) of regasified LNG from TOTAL’s global portfolio to Benin for 15 years, starting in 2021.

TOTAL will develop and operate the regasification infrastructure that will comprise a floating storage and re-gasification unit (FSRU) located offshore Benin and an offshore pipeline connexion to the existing and planned power plants in Maria Gléta.

The gas import project will supply plants in Benin, such as the new 127 MW power station at Maria Gléta, with imported liquefied natural gas, on preferential terms and will position Benin, capital of the WAPP (West African Power Pool), as the crossroads for gas and electricity in the subregion, the Beninois authorities say.

“This project is in line with TOTAL’s strategy to develop new gas markets by unlocking access to LNG for fast-growing economies. We are very pleased to have been entrusted by the Benin authorities to develop LNG imports and support a broad adoption of natural gas in the country,” notes Laurent Vivier, Senior Vice President Gas at TOTAL.

“Access to LNG will help Benin to meet growing domestic energy demand and add more natural gas to the country’s current energy mix, hence reducing its carbon intensity”.

Benin is one of the three countries that receive gas from the West African Gas Pipeline Company, but the authorities have complained, severally, that the supply is not only low, it is far from the contracted volume.

Dona Jean-Claude Houssou, Minister of Energy of Benin, says he congratulates TOTAL Group on its willingness to support the revitalisation of the country’s energy sector, “which is at the heart of the Government’s Action Plan (PAG)”.

He speaks of “the Government’s efforts to restore Benin’s energy independence, which is the foundation of the country’s ambitious economic and social development. The new legislative framework fosters the participation of private capital in the energy sector and is manifested in independent thermal, solar and hydroelectric power generation projects”.


ENI Reaches Hull Installation in Mozambique FLNG Project

Italian giant ENI has announced it has started installation works on the hull of theCoral Sul floating liquefied natural gas (FLNG) treatment and liquefaction unit that will be moored offshore in Mozambique.

The unit is part of the Coral South project, which will put in production the 450 billion cubic meters of gas in the giant Coral reservoir. The hull is expected to be launched in 2020, in line with the planned production startup of the Coral South Project in 2022.

The Coral Sul FLNG facility will have a gas liquefaction capacity of 3.4Million tons per year when completed and will be the first FLNG vessel ever to be deployed in the deep waters of the African continent. The vessel, which will be 432 metres long and 66 metres wide and weigh about 220,000 tons, will be able to house up to 350 people in its eight-storey accommodation module. The facility will be anchored at a
water-depth of around 2,000 metres by means of 20 mooring lines that weigh a combined 9,000 tons.

Construction works on the Coral Sul FLNG started in 2018 and are ongoing in seven operational centres across the world. Construction of the mooring turret began in March; construction of the hull’s 24 modules that contain the LNG storage tanks and sections of the treatment facilities began in September. Construction of the topside, consisting of 12 gas treatment and LNG modules, started last November, along with the living-quarters. By the end of 2019 the overall progress of the project is expected to exceed 60% completion with the total man-hours worked shortly expected to reach 10 million.

Drilling and completion activities for the six submarine wells that will feed the liquefaction unit will begin in September 2019. The wells will have an average depth of approximately 3000 metres and will be drilled in about 2000 metres of water depth. The activities, carried out by the SAIPEM 12000 drilling rig, will be completed by the end of 2020.

Alongside the LNG infrastructure under construction, the Coral South project also includes a number of initiatives aimed at enhancing the overall capabilities of the local workforce. These include specialized training activities for over 800 Mozambicans, who will eventually be employed during the operational phase of the project. Eni is also engaged in a broad programme of social, economic and health care initiatives, to support a long-term, diversified and sustainable development of the local communities.

© 2019 Festac News Press Ltd..