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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.


No Oil, Only Gas, in the Future of Sasol

By Fleetwood Grobler Sasol’s President and Chief Executive Officer

 

 

 

 

 

 

 

Future Sasol will comprise two market-focused businesses, Chemicals and Energy.

A key decision as a result of this is the discontinuation of all oil growth activities in West Africa and

resizing our upstream portfolio to focus on gas.

The revision of our strategy aims to have a greater focus on value realization for all stakeholders, business sustainability and enhanced cash generation. It acknowledges the need to streamline what was

previously a complex and wide portfolio.

The Chemicals Business will transform our portfolio towards specialty chemicals in which we enjoy differentiated capabilities and strong market positions that can be expanded over time. We will continue to focus on our commodity chemicals portfolio, however this will diminish over time as we focus more on specialty chemicals.

The Energy Business comprises the Southern African value chain and associated assets and will be positioned for higher cash generation through improved margins, cost efficiency and divesting of assets with low returns. This business will also pursue Greenhouse Gas (GHG) reduction through a focus on gas as a key complementary feedstock and renewables as a secondary energy source. These will be critical enablers to achieve our 2030 GHG reduction target and our longer-term sustainability aspirations.

These two businesses will be fully accountable for profit and loss, management of resources and capabilities. A lean corporate centre will enable the businesses by fostering synergies and integrating activities, setting strategic boundaries and allocating capital. These developments will support improved financial returns.

In tandem, resetting our strategy necessitated a revised operating model, which will become effective on 1 November 2020. The top leadership structure has already been realigned and optimised to enable this new model.

Our intent with Future Sasol is to deliver a Group that is streamlined, focused and positioned to succeed. It is therefore a matter of much regret that not all our employees will be able to make the journey to the new Sasol. In this, unfortunately, we have no choice. We have to put the sustainability of Sasol first, and the steps we are following are taken with only this in mind.

Future Sasol will not only look different, it will behave differently, requiring a change in culture and ways of working, and will be more open to partnering arrangements. It will remain heavily committed to South Africa and plans to work closely with the government to align with the country’s energy and economic goals.

-Sasolburg, August 21, 2020

Published for the benefit of paying subscribers in the August 2020 edition of Africa Oil+Gas Report


Tanzania’s Natural Gas Supply Sees A Spike from Mnazi Bay

By Toyin Akinosho

Wentworth Resources reported a surge in production of natural gas in Mnazi Bay, one of two main gas processing facilities in Tanzania, in November 2020.

Increased demand had prompted an 18% increase in Mnazi Bay production, to 68.8Million standard cubic feet per day (MMscf/d) in Q3 2020, compared with 58.3 MMscf/d (gross) for H1 2020.

Lifting of COVID-19 restrictions have helped the boost, the company reports.

Indeed, production volumes have also risen during Q4 2020. In November 2020, the volume averaged 74MMscf/d.

Wentworth also reported low operational cost of production of $1.72/Mscf (2019: $1.88/Mscf)

The Mnazi Bay facility has the capacity to supply volumes of 100 MMscf/d (gross).

Production from the Songo Songo Gas project, the country’s older processing plant, trended in the same upward trajectory as that from the Mnazi Bay during Q3 2020.

Songo Songo is being operated by Orca Energy.

Total output was 92.5MMscf/d at Songo Songo, including: (1) gas supplied directly to Industries (13.4 MMscf/d),; (2) to the Power Sector (47.5MMscf/d) and (3)as Protected Gas (31.6MMscfd). Overall, the output in Q3 2020 increased by 19% compared with the 77.8MMscf/d supplied at the Songo Songo plant in Q2 20

Fuller story of Tanzania’s overall natural gas market in 2020 is published in the January 2021 edition of Africa Oil+Gas Report, which is available to paying subscribers of the monthly journal. Also look out for our STEPPING ON THE GAS ANNUAL.

 


UNESCO inks Cooperation Agreement with Gas Exporters

United Nations Educational, Scientific and Cultural Organisation (UNESCO) and the Gas Exporting Countries Forum (GECF) have signed a Memorandum of Understanding (MoU) to bring the benefits of collaboration to the world at large.

Shamila Nair-Bedouelle, the Assistant Director-General for Natural Sciences at UNESCO and Yury Sentyurin, the Secretary General of the 20-member coalition of the leading gas exporting countries of the world, signed the agreement, which “will serve as a gateway of opportunities between the two entities in the areas of struggle against climate change, natural resources management, and positive developments across the globe, particularly in the Africa region”, according to a GECF release.

“The partnership will further allow the sides to focus on capacity building, technical support, and shared expertise”, the statement adds.

The GECF comprises of 20 member countries, of which six (6), or 30%, are African countries, including Algeria, Angola, Egypt, Equatorial Guinea, Libya and Nigeria. Other members include Bolivia, Iran, Qatar, Russia, Trinidad and Tobago, Venezuela, Azerbaijan, Iraq, Kazakhstan, Malaysia, Norway, Oman, Peru, and the United Arab Emirates. The GECF member countries  jointly control 71% of the proven gas reserves, 45% of its marketed production, 53% of pipeline, and 60% of LNG exports across the globe. It is headquartered in Doha, Qatar.

The MoU has been signed against a unique backdrop. The world’s overall energy demand is assumed to grow along with the global economy and population growth. The GECF experts forecast that in order to fulfil this increased demand, the world will likely see a symbiosis of conventional and renewable energies to solve climate issues and to meet the needs of nations for affordable energy. Natural gas is expected to shoulder the bulk of this demand on the back of its attributes of being the most environmentally friendly, affordable, flexible, and abundant fossil fuel

Natural gas is projected to become the largest source of primary energy by 2050, from currently 23% to 28%, according to the latest data available from the GECF Global Gas Outlook 2050. Along the way, natural gas is expected to play a vital role in decarbonisation options including natural gas-based hydrogen, also known as the blue hydrogen, with carbon capture, utilisation and storage (CCUS) technologies.

“The mobilisation of science for the benefit of society and the planet is now more urgent than ever. We need science and technology, we need access to science and technology, we need to be able to reduce the knowledge gap between different countries across the world, and therefore this partnership with the GECF is really a beacon of hope and light,” said Nair-Bedouelle, following the virtual signing ceremony. “The GECF serves as a platform for the science policy interface, underpinning the importance of the exchange of scientific knowledge, experience, and dissemination of information through research and production of global outlooks and statistical bulletins”, she explained, adding that UNESCO is “confident that this partnership will further harness the potential of science and technological cooperation to address global challenges, through advocacy and awareness raising at all levels of society and economic sectors towards achieving the sustainable goals of the 2030 Agenda and beyond.”

Scientifically-grounded data and insights are championed at the GECF, whose Secretary General emphasised that technology is key to the envisaged energy transition and climate action such as greenhouse gasses (GHGs) emissions mitigation. “Education and science-oriented exercises play a great role in environmental protection with a view to raise awareness and cultivate a “culture of energy responsible behaviour” or “energy scholarship,” Mr. Sentyurin noted. “The GECF is developing technologies, including ones in relation to reduction of GHGs emissions through the GECF Gas Research Institute, recently established in Algeria, and fully dedicated to discovering new technologies and innovations to achieve the ambitious sustainable development goals in front of us,” the GECF Secretary General added.

“The GECF’s ambition to steward the gas industry into playing a greater role in environmental protection manifests in our Environmental Knowledge and Solutions initiative. This 12-point agenda focuses on many aspects of our activities,” Sentyurin declared, while referring to the 2019 Malabo Declaration adopted by the GECF Heads of State and Government, which calls on the Forum to use natural gas as the core source of energy in the development programmes and climate change policies of developing countries, such as in Africa, to overcome energy poverty and to mitigate CO2 emissions.

As an observer organisation to the UNFCCC (UN Framework Convention on Climate Change), the GECF actively participates in the conference of parties, with the most recent statements made at COP24 and COP25. The Forum is also a regular contributor to the discussions of the UN Economic Commission for Europe (UNECE) Group of Experts on Gas, where it analyses natural gas’ leading role in attaining the 2030 Agenda for Sustainable Development.

“This is complemented by our rapidly growing relationships with the G20, BRICS, and others in the spirit of joint action as regards to humanity’s shared mission of sustainable development,” Sentyurin concluded.

 

 

 

 


Accugas Is One of the Top Four  Nigerian Domestic Gas Suppliers

With 113.5Millon standard cubic feet per day (113.5MMscf/d) averaged in 1H 2020, Accugas Limited has indicated itself as one of the top four natural gas suppliers to the Nigerian economy. The company is a subsidiary of the British headquartered Savannah Petroleum, which bought over the assets of Seven Energy in Nigeria. Accugas’ main hydrocarbon property is the Uquo gas field in Oil Mining Lease (OML) 13 onshore eastern Niger Delta basin.

Accugas’ competitors are Chevron. NDWestern and Seplat, the country’s biggest suppliers of natural gas to the domestic market. But unlike Accugas, all of them are in joint venture with either the Nigerian National Petroleum Corporation or its operating subsidiary, the NPDC. Between January and June 2020, the average gross natural gas output of these three JVs ranged from 222 to 320MMscf/d. This means that, on an equity basis, the output of Chevron, Seplat and NDWestern ranged between 99 and 144MMscf/d. By comparison Accugas’ 113.5MMscf/d average, in that period, is competitive.

The company increased its average gross daily natural gas production from the Uquo gas field  by  22.4% compared to the same period last year, from 92.7 MMscf/d (15.4 KBOEPD) to 113.5 MMscf/d (18.9 KBOEPD).

“In H1 2020, Accugas increased gas supply to the Nigeria power sector by 35% versus Q4 2019. This compares to wider industry performance which saw the gas shortage to supply the Nigerian power grid increasing by 33% versus Q4 2019”, Savanah Petroleum says in a statement.

The company achieved an all-time Nigerian Assets gas production record of 177 MMscf/d on 30 May 2020. While Accugas’ customers achieved an all-time record peak contribution of 11.5% of Nigeria’s electricity generation or 486MW on 23 May 2020, with the contributed electricity being exclusively generated from Accugas sales gas.

On 31 January 2020, Accugas entered into the first new gas sales agreement for the business in over five years with First Independent Power Limited, an affiliate company of the Sahara Group, for the provision of gas to the FIPL Afam power plant. Accugas is in the process of working with FIPL to validate the third-party infrastructure required to enable the commencement of gas sales.

In June 2020, Accugas signed a term sheet with a significant new industrial gas sales customer, a subsidiary of a well-respected international company, for an initial quantity of up to 5 MMscfpd of gas for an initial five-year period.

 

 


Moza’s Floating LNG Facility Nears Completion

By Fred Akanni

Construction of the Coral-Sul FLNG facility, Mozambique’s first Liquefied Natural Gas facility is almost completed. The floating plant will sail-away to the south east African country in 2021 to begin natural gas extraction in the vast offshore Rovuma Basin.

The lifting and installation of the last of the 13 topside modules, “configuring the entire gas treatment and liquefaction plant”, was announced by ENI, the Italian energy company which will operate the facility.

With this milestone, first gas from Coral-Sul FLNG is on course for 2022. “The massive 70 thousand tons topside was lifted onto the hull one module at a time and is now complete. However, construction continues with integration and commissioning activities” declares Roberto Dall’Omo, ENI’s General Manager on the Rovuma Basin project.

ENI discovered the Coral field in Area 4 licence Mozambique in 2012, a year after it encountered the Mamba field in the same basin: Rovuma. It estimates 16Trillion cubic feet estimated recoverable reserves of gas in the former.

The Coral Sul FLNG (meaning Coral South) is one of two projects on the field; farther down the line, the company expects to also develop the reserves in the north of the field under a project christened Coral North. ENI’s partners in Area 4 include ExxonMobil and CNP), Galp, KOGAS and the Mozambican state hydrocarbon company Empresa Nacional de Hidrocarbonetos (ENH) E.P.

These same partners are also involved in another project: the 15MMTPA Rovuma LNG facility, a much bigger, onshore plant which will be operated by ExxonMobil. The Final Investment Decision for that project has stalled.

ENI claims that the Coral-Sul FLNG, with a capacity of 3.4Million tons of liquefied gas per year (MMTPA) is the world’s first newly-built deepwater floating liquefaction plant.

It is based on six ultra-deepwater wells in the Coral Field, at a water depth of around 2,000 metres, feeding via a full flexible system the Coral-Sul FLNG.

 

 

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