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Kenya To Restart Distributing Small LPG Cylinders to Poor Households

$28Million project had been stalled by a court case for two years.

After a two-year court case, in which it was accused of distributing substandard cylinders, the National Oil Corporation of Kenya (NOCK) will start the distribution of the six-kilogramme (6kg) Gas Yetu cylinders to poor households in the country.

East Africa’s largest economy wants to wean its poorest people from the use of dirty wood fuel. A total of 109,649 six-kilogramme cylinders, 329,422 burners and 329,260 grills have been lying in the corporation’s warehouses since the distribution was discontinued on court orders in 2018.

The government had allocated $28Million for purchase of the cylinders to be sold at a subsidised $19 rate with complete accessories under the Gas Yetu brand. It’s a steep discount from the market price of $47 for the 6kg gas cylinder with cooking accessories.

The operation was disrupted by the discovery that fraudulent contractors supplied 67,251 faulty gas cylinders. The discovery indicated that 40% of the cylinders supplied to NOCK were sub-standard, including having faulty valves that posed the danger of fire eruptions.

The court case, instituted by the Consumer Federation of Kenya (COFEK) was dropped after certain conditions were met including bringing on board the third party cylinder inspector. “The exercise by a third party cylinder inspector to independently test the cylinders and confirm the integrity and safety of the same ahead of distribution to Mwananchi starts on Monday, May 25, 2020,” Leparan Gideon Morintat told, NOCK’s chief executive officer told the Energy Committee of the Senate, the upper house of Kenya’s bicameral legislature.

 


Egypt Reduces Licence Fees for Natural Gas Supply Operations

Egypt’s newly created Natural Gas Regulatory Authority has reduced the fees for commercial gas transmission, shipping, distribution, and supply licenses for 2020.

But the authority has, meanwhile, increased the fees for using the National Gas Grid to transport gas.

The new rates for commercial gas transmission, shipping, distribution, and supply licenses, are between 22-30% lower, and are as follows:

  • $ 0.044/MMBtu for transmission licenses, down from $ 0.057 last year;
  • $ 0.024/MMBtu for shipping licenses, down from $ 0.031 last year;
  • $ 0.016/MMBtu for distribution licenses, down from $ 0.023 last year; and
  • $ 0.006/MMBtu for supply licenses, down from $ 0.008 last year.

The regulator decided to increase the fee that companies pay to use the state’s national grid to transport gas from $ 0.29/MMBtu to $ 0.38 / MMBtu.

This is a return to the fee that was set in 2018, at which time the authority was just starting to begin issuing and revoking licenses for private sector industry players. It was reduced to $0.29/MMBtu in 2019.

Egypt is still navigating the transition from a state-run natural gas supply sector, to a mix of state and privately operated business

The NGRA was set up in 2017. In 2018, it issued natural gas import and distribution licenses with import licenses going exclusively to state-affiliated companies

Private sector companies, on the other hand, were given distribution licenses, which allow them to expand and build up the natural gas distribution grid.

 


Rovuma Catches the Bug

ExxonMobil operated Rovuma LNG Project in Mozambique, has joined the victims of the Pandemic.

Concerns about the effects of the new Coronavirus has compelled the partners in the 15 Million Tonnes Per Annum (15MMTPA) project to postpone the Final Investment Decision (FID) indefinitely.

The two-train onshore LNG project, to utilize gas from deepwater Area 4, had been on the drawing board for over six years.

FID on Rovuma LNG was due in the first half of 2020.

Partners had announced offtakers for the project as far back as 2017.

But Rovuma LNG has come up on the list of those projects from which ExxonMobil is making significant cut in their capital expenditure as a result of a contraction in economic activity created by the virus.

Gas in Area 4 was discovered by ENI in 2011. The block holds an estimated 85Trillion cubic feet of natural gas (proven), deep below the Indian Ocean seabed.

Mozambique Rovuma Ventures, owners of Rovuma LNG, include ExxonMobil, ENI and the China National Petroleum Corporation, which together control 70% of the holding, with the remaining 30% split into equal parts between Portuguese group Galp Energia, South Korea’s Kogas and Mozambican state oil company ENH.

 


Côte d’Ivoire Stimulates a Robust Domestic Market with Low Gas Reserves

Even with relatively low reserves of natural gas, Côte d’Ivoire is establishing an energy leadership in West Africa.

With just about 1 Trillion cubic feet, the 67th in the world, the country has taken several initiatives to monetize natural gas across power generation and public transport.

Two gas to power projects with combined 643MW capacity, have recently reached financial close.

And 150 buses will be running on Compressed Natural Gas by this time next year, a threefold increase from the 50 vehicles that were introduced for the pilot project in 2018.

Since January 2020, Côte d’Ivoire has secured key financing for its major gas-to-power projects, Azito and Atinkou. The former is a brownfield expansion of the existing Azito gas-to-power station, a 460MW plant owned and operated by Globeleq which uses natural gas supplied from Côte d’Ivoire’s offshore gas fields. Azito is being expanded by 253MW and its expansion project reached financial close in January 2020. Upon completion, the Azito plant will represent about 30 % of Côte d’Ivoire’s installed power generation capacity.  The expansion project relies on a debt financing package of EUR 264Million provided by several financial institutions such as the International Finance Corporation (IFC), the African Development Bank (AfDB); the West African Development Bank (BOAD); the OPEC Fund for International Development (OFID) and a pool of European Development Finance Institutions (EDFIs). Minister of Petroleum, Energy and Renewable Energies of Côte d’Ivoire, M. Abdourahmane Cisse, laid the foundation stone for Phase IV on March 7th, 2020 and first power is expected this year.

The latter, Atinkou or Ciprel V, is a project carried out by the Eranove Group, to develop a 390MW combined cycle gas-to-power station outside of Abidjan. A 20-year concession agreement was signed for the project in December 2018, and it just secured a financing package of EUR 303 million from the International Finance Corporation in March 2020. The full debt financing package was provided by several financial institutions such as the African Development Bank (AfDB), the Dutch entrepreneurial development bank FMO, Germany’s Deutsche Investitions- und Entwicklungsgesellschaft (DEG), the Emerging Africa Infrastructure Fund and the OPEC Fund for International Development (OPEC Fund).

The government is also enabling the right kind of business environment for the sector to thrive, notes African Chamber of Energy.

Four decrees were signed in the Council of Ministers on March 11th, 2020, to renew the exclusive exploitation authorization for the oil and gas fields of Foxtrot, Mahi, Manta and Marlin in Block CI-27. The decrees extend each authorization by 10 years, with the explicit goal of “ensuring the stable and continued supply of gas to the new power plants CIPREL 5 and AZITO 4 and guarantee national power supply sufficiency.”

Côte d’Ivoire’s transport company SOTRA (Abidjan’s Transport Company) has run 50 buses on compressed natural gas (CNG) since 2018. Following the successful trials, up to 150 CNG buses are expected to be driving on Abidjan’s roads by 2021.


OB-OB: First Gas Flow Pushed to 1st Quarter 2021

The schedule for completion of Obiafu-Obrikom to Oben (OB3) gas pipeline has been pushed further again, as a crucial part of the construction has been taken from one of the key contractors and handed over to others, who now have a global pandemic to deal with.

The 127 kilometre facility, under construction in Nigeria since 2013, is an important, grid length evacuation infrastructure, meant to deliver gas from the rich reservoirs in the eastern Niger Delta to the established markets in the west of Nigeria. On completion, it will enable the first major outline of a national gas grid.

Nestoil’s inability to run a 48 inch pipeline in a 60 inch hole under a riverbed spanning 2.8 kilometres, compelled the Nigerian Gas Transmission Company NGTC, the state firm sponsoring the project, to hand over that aspect of the operations to China Petroleum Pipeline Construction Company (CPPCC) and Brentex Petroeum Services, which is primarily a manufacturer of pipes.

Over the course of a full year between late 2018 and 2019 Nestoil attempted five times to run the fat pipeline under the riverbed, and for those five times, the formation collapsed. The mode of operation is ‘Directional boring’, also referred to as’ horizontal directional drilling (HDD)’, a minimal impact trenchless method of installing underground utilities.

The CPP has since imported equipment for the job, but the material had been held up in the Lags Ports for over three weeks, with Port officials unwilling to allow evacuation of the material, citing Coronavirus concerns.

All of which means that the target of completing the OB3 in June 2020 has failed, as other commissioning operations have to take place after the river crossing part of the project is done.

Nestoil was contracted to construct the 48” x 64.5 kilometre section of the OB3 pipeline from Omoku in Rivers State, to Umukwata in Delta State. The company said, in January 2019, that the project was 90% complete, and that it was looking to deliver it before the end of the year. But Nestoil has also lamented that its scope on the project spans the most challenging terrain of the pipeline. “Most of our 64.5 kilometre length runs through seasonal swamps, which are virtually impassable during the rainy season. In the past few years, average rainfall recorded in the Southern parts of Nigeria has increased steadily, resulting in unprecedented floods, especially in Rivers and Delta States”, Ernest Azudialu, Nestoil’s Chief Executive, told Africa Oil+Gas Report. “These flooded areas makes it almost impossible for appreciable work to be done during the rainy season”.

Engineering sources close to the project tell Africa Oi+Gas Report that Nestoil could invest more effort and tools in delivering the project and that NGTC could have exerted more oversight on the company’s operations. The depth of boring the HDD equipment, the sources argue, could have been deeper tan Nestoil appeared willing to go, and the contractor could have been targeting more compacted formations that would not readily break apart. Again, there have been observations that there were not always alternative rigs at the ready when one failed. Azudialo’s contention is that Nestoil is “constantly investing and improving our lot”.

The success or failure of the OB3 has ramifications for expansion of the domestic gas market in Nigeria.

In fact, its completion was a condition precedent for Final Investment Decision of some Domgas projects. It also provides alternative links to the Nigerian Southwest, whenever the crucial Escravos Lagos Pipeline system fails, as it often does.

This story is an updated version of the article that was published in the December 2019 edition of the Africa Oil+Gas Report, the monthly journal.


Accugas Signs Gas Sales Agreement with Afam

Accugas, a Nigerian subsidiary of Savannah Petroleum, has entered into a new interruptible gas sales agreement (IGSA) with First Independent Power Limited (FIPL), for provision of gas sales to the FIPL Afam power plant, an affiliate company of Sahara Group.

Afam has a current power generation capacity of 180MW.

The FIPL IGSA envisages the supply of gas (produced on the Uquo marginal field, with a maximum daily nominated quantity of 35MMscf/d or approximately 5.8MMBOED) by Accugas to FIPL Afam in order to augment its existing gas supply on an interruptible basis for an initial term of one year with the ability to extend upon mutual agreement.

Accugas currently sells to three customers, Calabar Nigerian National Integrated Power Plant, National Integrated Power Project (a Niger Delta Power Holding Company-owned power station), the Mfamosing Cement Plant (located in Cross River State, owned by Lafarge Africa Plc) and Ibom Power (a power station owned by Akwa Ibom State), for an aggregate maintenance-adjusted 2020 take or pay volume of 141.4MMscf/d.

The commercial terms of the FIPL IGSA are expected to augment the weighted average profitability of the Accugas portfolio while Accugas’ sales volumes, revenues and cash flows are expected to increase with no incremental capital expenditure, Accugas says in a release..


Nigerian Gas Reserves on the Increase, Development Grows, Says Regulator

Nigeria’s Natural Gas reserves has been on the incline from 2013 and is projected to continue to grow at a conservative rate of about 1.0%, the country’s Department of Petroleum Resources (DPR) has reported.

In 2018, gas development picked up to six (6) Non-Associated Gas (NAG) development plans from two (2) NAG development plans in 2017, the agency states in the most current annual report of the industry, released January 2020.

The growth, it argues, is attributable to growing commitments to gas projects.

The Domestic Supply Obligation (DSO) performance was about 48.0%. The national gas capacity performance for 2018 was about 80.0% with an average 1.3Billion standard cubic feet of gas per day (Bscf/d) gas delivery to the domestic market.

Overall, gas utilization in the country for 2018 shows the export market accounting for 41%, field/plant use accounts for 32%, domestic market is about 13.6% and flared gas is 11%.

DPR says in the report that “the zero routine gas flaring target in 2020 is vigorously being pursued by the Department. The impact of regulatory instruments such as Flare Gas (Prevention of Waste and Pollution) Regulations 2018 would undoubtedly facilitate the attainment of the zero-flare elimination target and improve gas utilization in the coming years”.

The Department continues to drive the on-going implementation of the Nigerian Gas Transportation Network Code (NGTNC), it explains. “The review of the Network Code licensing framework and development of all its ancillary agreements have been firmed”, the report says. The formal, special launch of the NGTNC is scheduled for Monday, February 10, 2020, on the opening day of the Nigerian International Petroleum Summit.


Key To Successful Stakeholder Relationship Management In The Oil And Gas Industry

By Jimmy Ahmed

Introduction

Since the 1980s, some major changes relating to the management of Safety, the Environment and Stakeholder Relations have been taking place in the Petroleum Industry, resulting in poor and unhealthy business relationships between Oil and Gas Companies and the various stakeholders in the Industry. Safety and environmental management are now very well integrated into all aspects of the business processes and operations. One key area that is still undergoing embedment and yet to be fully integrated into venture management, and which has the potential to add lots of value to the business towards sustainability is Business and Stakeholder relationship management. The Industry has since realised that the growing costs of managing the fall outs and negative reputation that the poor stakeholder relationships were having on their Business and profitability was unacceptable. This was the advent of “Business Sustainability”, the effective management and coordination of financial, social and environmental (the three pillars of sustainability) risks, obligations and opportunities. The impact of these changes on the Industry has not only been seen in the quality of and increased manning levels but also in the increased costs associated with managing these new focus areas of the Business, albeit, leading to more responsible and sustainable outcomes. This article focuses on one aspect of managing these changes, Stakeholder Relationship Management.

The more successful companies that become Partners of Choice, and clinch better oil and gas deals with major resource holders, are those with a good reputation on having built and are maintaining sustainable relationships with host governments and other stakeholders; relationships based on trust, respect and a win-win mindset. It is therefore fair to say that ‘any relationship that is not based on a ‘win-win’ formula will not be sustainable and will end up in ‘Acrimony’.

Many companies in those days felt they knew what the society and stakeholders needed without the need for effective engagements and consultations. In some cases, the Companies were already operating in the countries before the Independence of those countries, so adapting to the new system with local host governments was a novel idea. Over time, friction in the relationships developed, between the Companies on the one hand and the governments, the host communities, Non-Governmental Organisations (NGOs) etc. on the other hand, leading to major reputational issues, high down time and production losses in the business. Something needed to give or be done to change the dynamics. Chief Executives who should be spending most of their time managing the business were spending almost 100% of their time managing crisis, mostly caused by poor relationships with their Business Partners, Host Governments, host communities, NGOs, Regulatory authorities and the NOCs.

What Changed and why?

With increasing oil prices, increased profitability of the Industry and increased social and environmental awareness of the impact of the industry on society and the environment came “lots of interest and pressure” from Resource owners, (mostly Governments), Non-Governmental Organisations (NGOs), Business Partners in Joint Ventures and host communities. These interests and pressures were of a varied nature, from demanding: a bigger share of the profits by resource owners and host governments, more transparency from Business Partners, more inclusiveness by host communities and more sustainable social and environmental practices by the industry.

The following are some of the issues and root causes of the changes:

  • Lack of shared objectives and goals, lack of trust, and unmet expectations on the part of Stakeholders and Business Partners. Governments are committed to their people to provide social services while oil and gas companies want to invest in projects that will deliver the highest returns on investments for their shareholders.
  • Changes to Petroleum fiscals Laws and Regulations by Host Governments and Resource owners mostly targeted at resource control and increasing Government take.
  • Structural Tension caused by irreconcilable differences between the current reality versus the visions and goals of the Partners in the business relationship. Creating appropriate action plans to move all Parties from where they are, to where they want to be, often times increases the tension, requiring lots of formal and informal meetings and engagements. For example, in some developing countries, the Governments want some of their gas resources utilised for local/domestic consumption and power generation at gas sales prices much lower than oil and gas companies can get from exporting the gas. Governments also expect the oil and gas companies to spend their resources on domestic gas projects that do not rank high in Operating Companies’ economic project list.
  • Outdated fiscals, Petroleum Laws and Regulations requiring review in the light of changes that have taken place in the business environment over time. The fiscal terms of some of the contracts were incentivised and put in place to attract investors during periods of high-risk investments with the companies bearing all the risk. Companies wants to stretch the duration of incentives while resource owners feeling that the investor has more than recouped the invested capital, hence the need to remove/reduce the incentive earlier granted.
  • Increased Commercial disputes and mistrust between Business Partners in Petroleum Ventures leading to Arbitrations and court cases caused by perceived lack of transparency of the Operator and perception of Operator making ‘profit from cost’ using their home offices or proxy companies.
  • Host Communities impacted by the activities of the Industry agitating for more inclusiveness, sometimes in violent ways, alleging not being carried along by the Operators. Expectations of Industry to replace or act as governments in the Communities where they operate to provide infrastructure needs etc. mostly in developing countries.
  • NGOs constituting themselves into Industry “ombudsmen”, to ensure that the industry operated responsibly, ethically and in a sustainable manner for the benefit of society.
  • Perceived arrogance of oil and gas companies and their staff in dealings with host government officials and external stakeholders.

A recognised best practice to manage and foster Business Sustainability is Stakeholder Engagement. It leads to organisations learning from customers, employees, host communities, Host Governments, Partners etc. The engagements are not unidirectional, only pushing out messages, but form the basis for gathering business intelligence, understanding the business environment, other Parties’ positions and needs, finding common grounds and involving stakeholders or taking their needs too into decision-making. These engagements also help to build mutual trust in the relationships between the Companies and their various stakeholders.

The Petroleum Industry already had relatively small in house Teams or Departments and or external groups (Legal Firms and Lobbyists) that managed what was in those days referred to as External Relations or Public Affairs. These were mostly small teams of a few staff, often perceived to be “dead woods”, headed by a middle level Manager, mostly managing Corporate social events, with no voice at all in senior Management. They also led the organisations in managing these engagements with their limited understanding of the discourse at the time, sometimes supported by lobbyists, particularly when it came to proposed changes to Petroleum, Environmental, Safety or Fiscal Laws and Regulations with potential to impact the profitability of the Companies. These teams were essentially “Door Openers or Gate keepers”! That was the level of attention the companies felt this aspect of their businesses needed at the time.

Where we are today

As the realisation of the need for very strong and effective business and stakeholder relations management grew in the Industry, Relationship Management teams in these companies grew beyond imagination, in some cases with more staff than some Technical(Petroleum engineering and Exploration) departments put together! While those functions were in the past staffed mostly with “staff that were no longer needed in core functions”, today, those functions are staffed with the brightest and best, high potential staff. – ‘High flyer high potential’ technocrats and staff that should be busy managing Assets or Business Functions to improve the bottom line and grow the business are now sent to manage these Relationships. In some cases, as development assignments for the high potential staff, in preparation for senior management roles, same as with a stint in Safety Management.There is also a Stakeholder Relationship management staff on most senior management teams, and /or top management meetings.

These changes to the way Stakeholder relations are managed have also increased the cost of doing business but the very positive impact of these costs on sustainability and profitability are now also very obvious. Besides increased staff costs, Corporations are having to spend more on logistics too, including the use of private jets and company guest houses by Executives outside of operational bases, to attend numerous and sometimes very unnecessary impromptu crisis management meetings with various stakeholders within countries and globally. Some of these costs and inconveniences can be avoided by having structured engagement plans and programmes in place. The cost benefit analysis of these increased spending is now clearly seen as having positive impact on the profitability and sustainability of the business.

Suggestions and Recommendations

Companies will have differences in their understanding and management of their stakeholders but one aspect comes out as best practice today which is, that it is not an area to be neglected as a core aspect of managing non-technical risks to achieve sustainability of the business.

  • Effective management of stakeholder relations should not be put at the back burner but must be built into the business and venture processes from inception (feasibility stage of the project) right through to project abandonment.
  • Carry your stakeholders along in whatever you do to always have a shared understanding and build trust. Engage proactively with all stakeholders and do not decide what you think is good for them. The relationships and engagements must also be maintained and carried out in an ethical manner and based on mutual respect.
  • NOCs and resource owners are getting smarter and wiser, trying to get more or claw back value from their resources, so ensuring fair deals in win-win business relationships throughout the venture life will create a “goodwill credit” for the companies during difficult economic periods or for consideration in new ventures.
  • The era when Relationship Management positions were filled with “Dead woods” or people the company did not know what to do with is long gone and any company that does not understand that will lose a lot of value. The Business and Stakeholder Relations teams should have a mix of core Business staff (Senior Technical professionals versed in the Key business processes who can more convincingly engage stakeholders and are empowered / trusted to make some key decisions)and staff skilled in interpersonal and People skills. The teams should also be represented in the top management of the companies with a seat at top management meetings where business deals and issues are discussed. Organisations and companies that have realised the value these positions bring to the business have elevated them to the levels of Executive Directors.
  • Even in small companies or ventures with Partners, the importance of ensuring that all Parties are kept happy with timely and transparent information, to guide their decision making, for approvals of business plans and budgets should not be underestimated.
  • If critical skills and knowledge gaps exists in the capacity of your venture Partners, particularly with the ‘senior’ partners, mostly National Oil Companies (NOCs), the Operator should have a skills and knowledge acquisition programme in place to bridge the gaps and make them competent to fully understand the Business processes and be effective Partners. This can save valuable time in removing bottle necks in your achieving timely targets.
  • If contracts are meant to be reviewed periodically, all Parties MUST ensure that these reviews happen as planned or delays agreed in formal engagements, to avoid problems that could arise from perception of a party deriving undue benefits from the delay.Some contracts may give undue advantage to a party in the venture at some stage of the project, but ensuring that contract review clauses are adhered to in a timely manner will help to sustain the relationship and enhance trust.
  • For small companies who need to manage staff numbers, they need to identify critical stakeholders and develop appropriate relationships management strategies, i.e. whether and which stakeholders the company would directly manage, and/or use consultants to manage others.

Jimmy Ahmed is a Non-Technical Risk Management Consultant in the Petroleum Industry. He retired as an  Executive Director of Shell Pet. Dev.Co. of Nigeria Ltd.

 

 


In the last 30 Years, the Nigerian Gas Market Has Evolved

By Foluso Ogunsan

Nigeria has taken some big crucial steps to create a natural gas market, although people don’t always acknowledge it, says Ed Ubong, Managing Director of Shell Nigeria Gas.

“When people talk to me about gas monetisation in Nigeria, I ask: when was the first real big step?”, Ubong told a group of over 150 delegates, most of them petroleum geoscientists, at a recent Session on Gas Monetisation in Lagos.

Although Shell was supplying natural gas to customers in Aba, in eastern Nigeria, as far back as the early 1960s, the really big initiative for gas market development was still some years into the future, Mr. Ubong told his listeners.

“I think that the date was 1989, when government passed the LNG Act. It was a landmark year for export gas. It was also a landmark year for domestic gas (DomGas) because that was the year the ELPS-(Escravos-Lagos Pipeline System), the single largest gas infrastructure in Nigeria, was commissioned”.

In the thirty years since then, country’s authorities worked on infrastructure as much as they did on policy framework, sketching out the shape of what has so far become one of Africa’s largest natural gas markets.

“Fast forward to 1995, NLNG had taken FID on its train. Another ten years to 2006, two trains had been completed. Export gas heading on an upward curve. A success story”, Ubong showed in his historical, calendar based analysis. “At about the same time NLNG took FID, there was a big company in Eleme, a petrochemical plant. Big massive facility, fantastic and world-class. By 2006, it was up for its first privatisation”.

This was a sign that while the export gas was on an upward trajectory, there was a domestic gas deficit, Ubong explained to the delegates, at the session, titled Gas Monetization in Nigeria – Need for Concise Strategy, organised by the Nigerian Association of Petroleum Explorationists (NAPE).

“Things were not quite working and there were various things that were done to try and fix it. You will remember the NIPPs (Nigerian Independent Power Plants), power plants in the Delta, seven of them initially, later on it became 11. Let’s get power to these power plants. There were different thought processes going on.

“The year 2008 was also important for the gas industry. We created the DSO-Domestic Supply Obligation. The National Gas Supply Pricing Regulation became law in the same year. In 2008, the Nigerian Gas Masterplan was adopted. It was in 2008 that we started hearing words like MYTO- the Multi Year Tariff Order in the Power Sector. It was also in 2008 for many people that it became clear that Nigeria was interested in gas as a business. There were laws and regulations, some we did not like, some we thought we could work with and all of that. And it is important because if you consider the period between 2008 and 2009, during which time Seplat moved to buy Shell assets, the core of Seplat assets is all gas. If these regulations where not in place, the valuations would have looked a lot different. In 2011, Niger Delta Petroleum led a consortium to purchase a stake in Oil Mining Lease (OML) 34, possibly still the biggest gas producing block in Nigeria. There was some sort of clarity and direction. If you map it, you’ll see a lot of players emerging between that period and now. Significant expansion work done by Axella in the Lagos Area, building its infrastructure; significant work done by SNG(Shell Nigeria Gas) developing industrial clusters in Ogun State; the emergence of the likes of Falcon Corporation, supplying gas in the Ikorodu Corridor. Things begun to happen when there was some regulation that indicated direction”.

Full text of Ed Ubong’s presentation: Where to Put the Investment Dollars in Nigeria’s DomGas Market, is available in the December 2019/January 2020 issue of the Africa Oil+Gas Report.

 


Africa to Double Natural Gas Production by 2040

By Foluso Ogunsan

The sunny continent will contribute as much as 9.2% to global natural gas in that time frame..

Natural gas will be the only hydrocarbon source to increase its share in the global energy mix, remaining the fastest-growing fossil fuel, according to the GECF’s Global Gas Outlook Model

GECF is acronym for Gas Exporting Countries Forum, which held its 2nd International Gas Seminar on Malabo, Equatorial Guinea, on November 27, 2019.

The Seminar noted that global natural gas use will double by 2050; replacing more traditional fossil fuels and facilitating an energy transition towards sustainable development.

GECF member countries currently represent 71% of natural gas reserves, 44% of marketed gas production, 55% of pipeline gas trade and 53% of LNG trade globally.

“Our main message is that natural gas is the destination fuel and will play a central role”, said  Yury Sentyurin, GECF’s Secretary General. “We continue and will continue to defend the position of the Forum on benchmark prices, stressing that oil indexation is still the optimum choice for buyers and sellers of gas.”

The African continent is set to increase its presence in the global energy sphere, more than doubling its natural gas production by 2040 and altering the global energy supply mix in the process. Africa will contribute as much as 9.2% to global natural gas production by 2040, resulting in an expansion from 255Billion cubic metres to more than 505Billion cubic metres and corresponding to a compound average annual growth rate of 3.4%.

“Natural gas is growing to become the fuel of choice globally,” stated. Seyed Mohammed Hossein Adeli, Head of the Iranian Delegation. “The share of gas in the energy mix used to be 18%. Currently, it is 23% and has the prospect to increase to 26% in the next couple of decades. Gas is replacing coal and oil. Coal represents 26% and will be down to 17-18%. Oil is now dominating at 32% and is going to be down to 25-26%. This goes mostly to gas and renewables.”

The Gas Exporting Countries Forum 5th Gas Summit is organized by Africa Oil & Power and is part of the Equatorial Guinea Year of Energy.

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