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What is the Economic Justification for the Nigeria-Morocco Gas Pipeline?

By Dan D. Kunle

The Nigerian state hydrocarbon company, NNPC Ltd has announced, with flourish, the plan to take final investment decision (FID) on the proposed Nigeria to Morocco to Europe Pipeline by 2023.

But is this the important project that NNPC and the Nigerian Government are making it out to be?

Mele Kyari, the NNPC’s chief executive, reportedly restated the price tag: $25Billion to Bloomberg. He was also more forthcoming about the length: 5,600Kilometres.

The line is proposed to originate from Lagos and run parallel the West African Gas Pipeline currently linking Nigeria and Ghana, a project which has struggled with certainty of gas delivery and has underperformed its contractual obligations for the 10+years it has been in operation.

The facility, for which a Memorandum of Understanding (MoU) between Nigeria, the Economic Community of West African States (ECOWAS) and Morocco was signed in late September 2022, now looms larger in our consciousness than any other hydrocarbon evacuation project in play, in the context of Europe’s desire for natural gas to replace Russian supply.

“I am not unaware of the phosphate fertilizer production and supplies from Morocco to Nigeria. But this monoproduct is not sufficient to justify a gas pipeline, as compared with LNG plants and regasification facilities…”

Last March, the OPEC Fund agreed to a $14Million contribution to a $90Million loan for the Front-End Engineering Study (FEED) of a part of the Project.

The line will ultimately pump Nigerian gas through the Maghreb-Europe pipeline to the European gas network. Along the route it is expected to supply gas to the land-locked countries of Burkina Faso, Mali and Niger. In will pass through Benin, Togo, Ghana, Côte d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, The Gambia, Senegal and Mauritania.

Among the questions that keep coming up, are: How sudden has the economic and technical justification been validated for this type of project from Nigeria to Morocco?

At what cost is this project and where is the funding likely to come from?

Who scoped this project?

Have all the maritime permits and approvals, country by country, been obtained?

Who are the offtakers, where are their Gas Sale and Purchase Agreements (GSPAs)? Who are the producers? What are the upstream details? Where is the investment plan by NNPC for the production of the gas that will be dedicated to this ambitious pipeline?

Who, when and where will the gas be produced to feed into this type of an ambitious dream?

How many years will it take Nigeria and Morocco to implement and complete this ambitious project?

It may be pertinent to ask the Nigerian government and NNPC Ltd, what has happened to the Obrikom-Obiafu to Oben (OBOBOB ) project, which construction has lasted 16 years; what is the status of that project now?. What is going on with this very important project from the East Niger Delta to the West of the country?

Why would Morocco not consider building a REGASIFICATION facility in her country and also possibly acquire LNG carrier vessels to move around the ocean waters of the world?  Is this not more cost effective than embarking on an extensive undersea gas pipeline?

Morocco does not need this pipeline all the way from Nigeria, unless there is something we don’t know. Could it be political and territorial ambition? But for what purpose?

Morocco can purchase LNG from Senegal and/or Mauritania; countries that are close to her, either by LNG carrier vessels, which are more flexible or by gas pipeline, because of the short distance.

Does the MoU between Nigeria and Morocco imply that the Federal Government and NNPC abandoned the AKK pipeline to Niger and Algeria enroute to Europe, in favour of this undersea line to Europe through Morocco?

Why will the Nigerian government want to waste time and money in this critical period when we have no adequate domestic gas delivery framework?

Does this Nigeria-Morocco gas pipeline replace the other LNG plans; Brass LNG and OK LNG?

Twenty Million Ton capacity LNG plants will cost about $21Billion today and Nigeria with her gas resources can actualise these projects in five years, if we are determined to join the LNG suppliers race in the world.

The USA started LNG production and supply only in the last ten years and they are gunning for Number 1 position against Qatar and Australia. It will be very uneconomical for Nigeria to abandon LNG projects  for a white elephant, undersea gas pipeline from Lagos to Morocco.

There are so many numerous advantages for Nigeria to develop her LNG projects because of the value additions in maritime and shipping business. The cost of maintaining the gas pipeline underwater is enormous.

The global race for LNG production and supplies is heating up because of (1) the Russian/ Ukraine conflict and (2) gas is a transitional fuel. If the supply from Russia had not been through pipeline, but by LNG vessels, the situation would not have been this precarious.

Having rationalized and reviewed this ambitious gas pipeline between Nigeria and Morocco, I am not unaware of the phosphate fertilizer production and supplies from Morocco to Nigeria. But this monoproduct is not sufficient to justify a gas pipeline, as compared with LNG plants and regasification facilities as the case may apply to each country. At any rate, Togo has huge phosphate deposits and it is close to Nigeria, so why can’t Nigeria simply develop the deposits next door?

From records, ECOWAS economic treaty and Nigeria’s development plans had recommended a railway system in the region that will, among others, transport phosphate deposits from Togo to the Federal Superphosphate fertilizer complex in Kaduna.

Have NNPC and the Federal Government abandoned the Trans Sahara Gas project that was going to go from Nigeria through Niger Republic (also expected to pump its own gas) to Algeria and Europe?

Dan Kunle is a business and privatization consultant.


LPG: Lagos State Obstructs Ease of Business

The Selai Gas Company is a downstream Nigerian gas entity which launched in April 2022 as an LPG retail company with a community empowerment focus. It is also a vehicle for manufacturing LPG cylinders as well as (ultimately) delivering gas for power. It was inspired by the national authorities’ proclamation of a decade of gas, but as it turns out, most of its two-year journey from drawing board to first retail station has been characterized bby obstacles with sub national regulatory agencies.

Africa Oil+Gas Report’s Akpelu Paul Kelechi spoke with Selai Gas CEO DAMILOLA OWOLABI on the issues, zeroing in on the company’s engagement with regulatory authorities all the way from inception of the idea to delivery of the station. She also speaks about how the processes could be improved.

You chose this particular place was because you have a history here and to bring the gas closer to the people. Are there any other reasons?

We want to be able to create a platform where we give you cylinders at an affordable rate and you spread the payment over a period of time. So, again as an earlier mentioned, Yes, we are in business to make money but also, we want to create an impact within the neighborhood.

What about the logistics in setting this place up?

There were a number of logistic challenges. We had to deal with the “area boys,” (street toughs), we had to deal with the Landlord Association, you know, it was a lot of work and convincing sessions that we had to have with them. One thing the (widespread youth protest) End SARS did for my business thinking was a mind shift. It made me see that everyone in any community where you where your business is situated in is a stakeholder, right? You’re not just coming in because you want to make money off that community; you need to bring them into your business as well. So, End SARS (the widespread youth protest) happened here and this neighborhood was a mess during End SARS. While it was happening, the head of the area boys was in touch and he was giving me updates of what was going on. By the time I came, this entire place was like the war zone because you could literally see corpses on the street. It was very tragic. But one thing I noticed was that there were two stores that were not inflicted by the End SARS and all.

 One of the shops belongs to a friend of mine who owns a grocery store down the road. And another one was the NNPC stand right opposite here. So, for him, why didn’t they touch it? When I asked the area boys why they secluded his own store from the attacks, they said, “Alhaji has been very good to us Alhaji is a man of the people, he carries us along and all that. Again, it comes back to making seeing them as some kind of stake holder in your business. For the NNPC, I think why that happened was that they got an information that product was on board as such they couldn’t throw in fire. Then, when they also tried to vandalize the place, someone came and told them that his family member works here, so they should please stay away and all.

Those two experiences helped me to build more like a strategy on how to relate with the community.

 Are there any specific regulatory hurdles that you had to scale to achieve this?

A lot, in fact they are countless. We didn’t have issues with the Nigerian Midstream and Downstream Petroleum Regulatory Authority NMDPRA (formerly Department of Petroleum Resources, DPR), because they were very professional, they knew what they wanted and we kept to it. But with the Lagos State government, my goodness! It was like a lot of agencies where just duplicating their responsibilities. I have no business with Lagos State Ministry of Energy when NMDPRA (formerly DPR) was already in the picture. The latter already told us what we needed to do and we were already in line with that so why go to the Lagos State Ministry of Energy? After NMDPRA (formerly DPR) had given us their approved Environmental Impact Assessment EIA, we still had to go to the Lagos Ministry of Environment to do another EIA. We also had to go to the Lagos State Town Planning and that was the toughest because there were lots of issues, we had to deal with them. The process is way so cumbersome; it took us roughly about it eight months to get out of there.

Imagine that your investment is tied down for eight months; your bottom line would feel it. We had to wait eight months to be get approval from Lagos State Town Planning and there were lots of hurdles, there were lots of back and forth, there were so many things that were not needed. I’m very knowledgeable about the industry so I knew at a certain time what we needed to get in place, our safety measures was top notch and our documentation processes were high quality, but these guys always just have a way of frustrating your effort. It takes a special Grace and special knowledge and strength to be able to run a business in Nigeria, particularly Lagos. I don’t know the ease of business that is being said in Lagos because there is no ease of business; it is really tough.

How do you rate the various government agencies in making this place reality?

I would score the Nigerian Midstream and Downstream Petroleum Regulatory Authority NMDPRA (formerly DPR) eight (8) out of 10 because they did very well in helping with the processes. They know what they are doing and they were very professional about it. But for the state government, they just had everybody in that space and they really didn’t even have a clue of what needs to be done. For the state government agencies. I will give them two (2) out of 10 because their processes were really stressful. We had to deal with Lagos State Government for about eight months while we worked with NMDPRA (formerly DPR) for barely two months.

If not for the Lagos State government, this plant would have been open since November 2021.

From our calculations and from what we had in the plan, it was supposed to be opened by November of 2021, but the Lagos Government didn’t make that happen. Once you get this document, another agency asks for another document; once you don’t get that another one comes and you are like, it is the same thing that I got from this other agency and they would tell you, well, you have to also get this from us because you are planted in Lagos; in a case of explosion for instance, NMDPRA (formerly DPR) is at the federal level, they won’t be the ones to come to your rescue, it is we the state government. So you need to cover all those agencies.

Some would argue that those checks that the Lagos State government had to make you go through are to ensure that you are doing the right thing.

I think there were just too many duplicated efforts; aside town planning, which is very important, I honestly think we had no business with the Lagos Safety Commission because NMDPRA (formerly DPR) already gave us a suitability approval; they came here, they saw the place and they agreed it is suitable. We also invited the town planners and they came here as well for suitability and they confirmed it, okay. If NMDPRA (formerly DPR has given the suitability report to be okay, why are we dealing with the Lagos State safety commission again? Why we dealing with Lagos State Environmental Protection Agency? We’re dealing with safety commission, LASEPA; we have to deal with Ministry of energy when DPR had already covered that and each of these agencies were asking for their own different EIAs on the same plot of land. How do you explain that? So, each agency wants you to give them a separate EIA. When I tell them, I have an EIA already that has been done, they say no, they have to get their own registered consultants to come and do the EIA. These multiple duplications cost us so much.

“Even though the Lagos State government had given us approval, we also needed the approval from the local government because they were not going to let us see the day right? So, a lot of unbudgeted expenses were there and we didn’t even see it coming”.

But the government at all levels has touted the mantra about ease of doing business …

Ease of doing business doesn’t exist in Nigeria. Particularly in Lagos. I don’t know of other places but particularly in Lagos State, the ease of doing business mantra is not working here.

You have enumerated some of the challenges that you had to face but what solutions would you proffer if you were in government?

I would say, if you want to setup a gas plant in Lagos, once you have the approval from the NMDPRA (formerly DPR), and you have the approval from town planning, the urban and regional planning, you’re fine. Let’s even say the they want their own Ministry of Energy to have a part in all this since DPR is at the federal government level, so the Ministry of Energy can come in at state level. Once these two state agencies give you the go ahead, they can share that information with other agencies. I don’t have to go to LASEPA, I don’t go to the Safety Commission, I don’t have to go to Lagos State Building Control Agency LABCA for instance. I don’t have to go to all those places, right? Once Town Planning gives you a go ahead and the Ministry of energy okays it, come on, they should share that information on the state level. So, all you need to do is, once they come to you and ask, do you have this from minister of energy, do you have this from the ministry of physical planning? Yes, and you are fine. But we had to merry-go-round six-to-seven agencies, spending money and wasting time and they had to give us different documents for the same project, it didn’t just make sense.

The government has declared this decade, the next 10 years as the decade of gas and the business you are into really fits into that profile. I mean, you are supplying LPG and you help reduce the amount of CO2 that is emitted in this community; but has the federal government in any way kind of incentivized you?

You mean financial support from the government, not at all. Everything has been equity and bank loan.

How would you get your supply?

Currently because we do not own our trucks yet, we’re not able to buy directly from NLNG. What I mean by that is, where NLNG discharges their vessels at whatever terminal in Lagos, you can buy at a cheaper rate from them. That is, cheaper than what’s the major marketers are selling. We have not been able to do that because we don’t own trucks. So, at the moment what we’re doing is third party trucks where we have to get trucks from truck owners and we load products from the major marketers. Yeah, and that really is a lot of Cost.

Also, the short term goal of Selai is actually to own our own trucks where we can lift our products from the NLNG at a more competitive rate compared to what the major marketers are doing and where we can also use those trucks to supply other gas plants because by the time you own your truck you’re able to control the number of products that come to you, you’re able to get as much as you want as against relying on someone else to supply you. And it’s another means of income for the business as well. And that also helps us to supply other plants within the neighborhood.

The major marketers can you expand on that?

The major Marketers are basically the guys are import; so, the Rain Oils of this world, the NIPCOs, 11 PLC and the rest. Yeah, we have to buy from them because we don’t own our truck yet to be able to get directly from NLNG.

What are the facilities you have right now that could bolster your business?

We have a 30 Tonne tank and we have our delivery arm as well that was what I mentioned earlier when I talked about “Uberizing” the place. We also have able and experienced staff and our customer service is top-notch.  We’ve been doing quite a number of training actually in the last six weeks for our staff because we want to open well, we don’t want to open and we don’t want to open to the public and we’re having to deal with a lot of issues. So what we’ve been doing is training on safety and customer service just to help every staff of Selai Gas perform optimally when our gates are opened to customers. I also want to mention that we have the part for accessories, what we call Selai Accessories. We sell cylinders and cylinder accessories and you could also call for a technician to come check on your burners, or check on your cylinder back at home and technician will be sent to you. One of the midterm goals for Selai is to own our cylinders because we cannot thrive in this cylinder program without owning our own cylinders. So, at the moment, we’re in partnership with a company here and we buy cylinders from them but eventually, our goal is to own our cylinders.

When you say own, do you mean you want to produce your own cylinders?

Yes, we want to produce our own cylinders.

How soon would this happen?

It’s still in the works but right now, we have secured a place on Lagos-Ibadan Express Way because we don’t want to import cylinders. I see from the market survey that there are too many regulatory issues that you’re going to be dealing with if you are importing cylinders and this is too expensive. So what we want to do with the help of the government, the NCDMB, Bank of Industry, you know, so we’re hoping that in the nearest future, we’re able to make use of that land on Lagos-Ibadan Express Way to build a cylinder production plant.

I don’t want to bring in cylinders from China because I know that I have the capacity to do it in house. So we’re appealing to the agencies of the government that are involved in helping medium scale businesses to thrive to please reach out to us and we’re happy to reach out to you as well. But there’s a lot of bureaucratic processes in getting this done. We want to be able to share our business ideas before them, share our goals before them and let them know that we’re not in this business for ourselves. We’re more in this business for the impacts on the community.

If you want to put a number to it, to set up an LPG filling station like you have done, what is the figure like?

At the time our business was a paper, a business plan, all we have projected was maybe about a hundred million naira for the kind of picture we had in mind for a standard gas plant. But at the time of implementation, well inflation caught up with us and exchange rates was something else and we had to do with all of that. So, if you have in mind to build a standard gas plant in Nigeria, particularly Lagos, I would say you should plan within 150 to 200Nillion Naira because the price change is alarming.  You sleep today at a particular price and the next morning you are calling the vendor to say okay, send your account number let me pay the money and he tells you madam, forget that invoice, I’m sending you something else because things have changed. What can we do? The truth is, there are quite a number of unforeseen expenses that you’re going to incur. in our business plan, we didn’t foresee that we’re going to spend so much with regulatory agencies particularly Lagos State. We didn’t see that coming. We also didn’t know that we were going to even pay so much to the local government. That’s another thing I forgot to mention. Even though the Lagos State government had given us approval, we also needed the approval from the local government because they were not going to let us see the day right? So, a lot of unbudgeted expenses were there and we didn’t even see it coming, but we have to just move along because we have come that far and we couldn’t just go back.

 

 

 

 

 

 


Nigerian Gas Investment-Seven Thematic Areas

By Ed Ubong

Nigeria declared A Decade of Gas on March 29, 2021. We like to think of that declaration in the following areas.

Gas For Power-The most important area is that gas must provide power and electricity for Nigeria. The Gas for homes-we are keen to seeing that Nigeria’s gas is used for cooking.

Gas for industries-The third thematic area is that gas must drive Nigeria’s industrialization.

Gas for Exports– This is very important from a foreign exchange perspective. Nigeria must play in the regional and international markets with respect to gas.

These four areas that are the end products of gas, require three sets of enablers.

The first one, we call it Infrastructure for gas. We must build the required pipelines that would ensure that gas can be utilized in country. We must also support virtual operators that can move gas without pipelines to where it is needed while we are building those pipelines.

The second enabler is Regulatory framework, pricing, and security, having to do with the infrastructure and the business climate that supports gas investment. All these must be in place for investors to be able to support us as we move on to the decade of gas initiative.

The third enabler is the human capacity- we must build for the gas sector; train . new professionals and retool all professionals who are able to do the switch from oil to gas as we sort of continue the transition.

So, what has happened since Nigeria declared a decade of gas on March 29, 2021?

About gas to power, there have been significant.

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62nd Anniversary/ Decade of Gas: What Took So Long?

Nigeria has come a long way trying to monetise its vast gas reserves, which have quintupled from 38Trillion cubic feet in 1980 to 200Trillion cubic feet by 2021.

In the last 20 years the country’s policy makers have announced headline grabbing “plans” around gas utilization.

After the stalled Gas Master Plan (2008), the frustrated Gas Revolution (2012) and several other proposals, the continent’s largest warehouse of natural gas has declared The Decade of Gas (2021 to 2030).

In the 18 months since the declaration of the “decade”, however, there has been no published, detailed plan of action/activity indicating what boxes the government is ticking and how enterprises are to key into the vision to make Nigeria an attractive gas-based industrial economy, giving primary attention to meeting local gas demand requirements, and developing a significant presence in international markets.

There are promising signals in the new legislation, the Petroleum Industry Act (PIA). We summarize some of them here, but we argue that legislation is one thing and its different from a Plan which helps to hand hold investors and enable projects.

The PIA creates a Midstream & Downstream Gas Infrastructure Fund to enable government make equity investments in infrastructure to increase domestic consumption of natural gas and encourage private investment , reduce/ eliminate gas flare; the new law also updates the previous Domestic Supply Obligations to ensure the gas gets from producers to point of use. The PIA adopts the framework of the pre-existing network code to enhance domestic gas distribution and establishes a fiscal framework for gas hitherto unsettled.

But there are a lot of areas still hanging and it takes an actionable plan to deliver on the intents of the legislation.

It is the failure of excitement to take plans to delivery stages that is responsible for the lack lustre performance of the Nigerian gas market, compared with Algeria and Egypt, its peers.

And yet Nigeria has been constructing gas utilisation infrastructure for over 35 years.

The One -Billion cubic feet a day (1Bscf/d) – Escravos–Lagos Pipeline System ELPS, commissioned in 1989, was primarily intended to …

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Petrofac Wins $300Million Contract for Gas Processing Facility in Algeria

Petrofac, leading a consortium with Genie Civil et Batiment (GCB), has signed an engineering, procurement and construction contract with (Algerian state hydrocarbon company) Sonatrach for the Tinrhert EPC2 Development Project. The contract, signed at an official ceremony in Algiers, is valued at approximately $300Million, with Petrofac’s share around US$200 million.

Located in Alrar, around 1,500 kilometres southeast of Algiers, the project will provide a new Central Processing Facility (CPF) with inlet separation and decarbonisation units. The scope of work also includes tie ins to the existing Alrar Separation and Boosting Facilities, along with commissioning, start-up and performance testing. When completed, the development will boost natural gas production and remove CO2 from the field’s gas reserves, within specifications for the global market, enabling further economic growth in Algeria.

A Memorandum of Understanding (MOU) between Petrofac and Sonatrach’s Algerian Petroleum Institute (IAP) was also signed at the ceremony. The collaboration is designed to build local capability in support of Algeria’s nationalisation objectives.

The IAP was created in 1965, with the objective of providing qualified personnel for the development of Algeria’s energy industry. The Petrofac/IAP partnership will modernise training schools, construct new facilities, and provide training and competence management solutions for local engineers. In addition, Operations and Maintenance training programmes will be implemented for both local and regional markets. The MOU also encompasses the development and roll out of e-learning resources.


Mozambique Commences Deepwater Gas Production in September 2022

Mozambique will start monetizing the natural gas accumulations in the deepwater Rovuma basin, in the Indian Ocean, from September 2022.

That is the date the first cargo of Liquefied Natural Gas (LNG) will be exported from the 3.4Million Tonne Per Annum (3.4MMTPA) Floating LNG on the Coral South field in the basin’s Area 4 concession.

The gas is contracted to bp for 20 years with an option for a 10-year extension; it could help in Europe’s gas supply crisis.

September 2022 will be roughly 12 years and seven months since Anadarko-the now defunct American independent- discovered the giant accumulations of natural gas in Area 1 in deepwater Rovuma basin. It will be about 11 years after ENI discovered similar resources in Area 4, adjacent to Area 1.

For the otherwise aggressive operator ENI, Coral South FLNG is one of its longest discovery- to- market hydrocarbon projects, at least in Africa.

Thus, for the otherwise aggressive operator ENI, Coral South FLNG is one of its longest discovery- to- market hydrocarbon projects, at least in Africa.

ENI, in 2015, discovered the giant Zohr in deepwater Mediterranean, offshore Egypt. By 2017, the field was in production, supplying mostly Egyptian power plants.

Area 4 is operated by Mozambique Rovuma Venture (MRV), a joint venture led by ENI and consisting of ExxonMobil and CNPC (China), which holds a 70% participating interest in the concession contract. Galp, KOGAS (South Korea) and Empresa Nacional de Hidrocarbonetos (Mozambique) each hold 10% stakes.

The Coral South FLNG platform has storage tanks on the hull and 13 modules on top, including a liquefaction plant, an eight-story module that can accommodate 350 people and a helicopter runway.

 

 


ENI will Start Small with Tango FLNG, Then Add a Bigger Floater

The Tango Floating LNG vessel that ENI has acquired with its purchase of Export LNG Ltd can only process 0.6Million tons per year, or a fifth of the 3Million Tons Per Annum (3MMTPA) the Italian giant expects to produce, at peak, from Congo’s Marine XII project, where the facility will be deployed.

ENI is now scouting around for larger vessels, while the Tango FLNG commences activity in the second half of 2023, following the completion of mooring and connection works necessary to tie with the Marine XII network and infrastructure.

ENI is keen on tallying up gas projects all over as many of its African fields as possible, to ensure that Italian gas market is adequately served in the wake of the reduction of Russian gas supply to Europe.

“We are increasing our gas production and will send to Italy and southern Europe all the gas we have found,” ENI’s CEO Claudio Descalzi said in May 2022.

“The acquisition of this facility (Tango FLNG) allows the development of a fast-track model capable of seizing the opportunities of the LNG market”, ENI said in a statement, adding that “the high flexibility and mobility characteristics of the Tango FLNG will favour the development and enhancement of ENI’s equity gas by accelerating production start-up time”.

The Tango FLNG, built in 2017, has a treatment capacity of approximately 3Million standard cubic meters/day and an LNG production capacity of approximately 0.6Million tons per year (about 1 billion standard cubic meters/year), h whereas the Marine XII project, when fully operational it will provide volumes in excess of 3Million tons/year (over 4.5 billion cubic meters/year).


TOTAL’s South African Gas Project Likely to be Assailed by Activists

By Toyin Akinosho

TOTALEnergies expects to sign a head of agreement with Petroleum Agency South Africa (PASA) in late August and apply for production licence for its Brulpadda -Liuperd gas project by September 2022, but the likelihood that the project will have a smooth ride to delivery in 2025 is far from certain.

The Brulpadda -Liuperd gas and condensate reserves are located in Block 11B/12B in the deepwater Outeniqua Basin, 175km offshore off the coast of the Western Cape; just the right place and context that the country’s passionate, well-funded, environmental activists will likely choose to hold it up.

The plan is to pump the gas to the 200Million standard cubic feet per day (200MMscf/d) Gas To Liquids Plant operated by state hydrocarbon firm PetroSA at Mossel Bay also in the Western Cape.

TOTALEnergies application for production licence “is almost certainly something which will be subjected to legal opposition from climate justice groups and nongovernmental organisations opposed to the development of the gas reserves”, reports EWN.co.za, a South African online newspaper.

“The barrage of legal cases against fossil fuel projects is a significant concern for the Central Energy Fund CEF, the state energy parastatal”, EWN reports, quoting Ayanda Noah CEF’s Chief Executive who is looking forward to working with TOTALEnergies on the project. “There is litigation just from all angles. In fact, I think all our oil and gas projects – there’s litigation on all of them, which is a challenge,” she says

TOTALEnergies estimates around 3.4Trillion cubic feet and 200Million barrels of condensates of recoverable reserves in the two fields.

Ayanda Noah told Fin24 in an exclusive interview. “The plant needs to be upgraded. That work will have to be done, and I believe it will take about 12 to 18 months. The gas is coming in about 2024 to 2025 – so it’s literally around the corner.

But just a week ago, Barbara Creecy, the South African Minister of Forestry Fisheries and the Environment shot down a second appeal by the Turkish Karpowership group for ship-mounted gas-fired power plants at harbours in Richards Bay, Ngqura and Saldanha Bay, saying that the country’s desperate need for power should not come at the expense of the Constitution or the environment, and subsequently human beings.

Ms. Creecy’s decision fits a pattern of anti-hydrocarbon activism in South Africa.

TOTALEnergies has been, indeed, an exception to the rule. Last February the Western Cape high court ruled, in favour of fishing communities on the West Coast, against Searcher Seismic’s proposed multiclient survey, planned to acquire  10,000 sq km of three dimensional (3D) and around 22,014 km of 2D seismic data, over a number of blocks in the west and southwest coasts of South Africa, covering the Outeniqua Basin and its sub-basins, including Bredasdorp, Infanta, Pletmos, Gamtoos, Algoa and Southern Outeniqua Basins.

That ruling came about 40 days after Shell lost its bid to appeal an interdict granted to Wild Coast small-scale fisher communities opposed to its 3D seismic survey. The Australia-based Seismic Searcher decided to discontinue pursuing the case and announced the immediate demobilization of its survey vessel, the BGP Pioneer.

ENI has also had challenges with activists against its plans to explore off the Kwazulu Natal, right in the Indian Ocean.

 


Genser Secures >$400Million for Gas Pipeline and Processing Projects in Ghana

Genser Energy has achieved financial close for an eight (8)-year $425Million funding package to in part, finance the following:

  • a 100 kilometre natural gas pipeline to Ghana’s second largest city, Kumasi
  • a 200Million standard cubic feet per day (200MMscf/d) gas conditioning plant at Prestea, Ghana
  • and a Natural Gas Liquid (‘NGL’) storage terminal at Takoradi Port as a major step in Genser’s

The funds, which comprise of a syndicated senior loan facility of $325Million and a $100Million mezzanine loan facility, will also be used to refinance existing debt.

Concurrent with the fundraising, Genser signed an offtake agreement with Trafigura for 100% of NGLs, primarily propane, butane and ethane, as well as Liquified Natural Gas (‘LNG’) to be produced from the gas conditioning plant in Prestea. In addition, Trafigura participated in Genser’s mezzanine loan facility and provided additional funding to build increased storage capacity at the proposed Takoradi NGL Terminal.

“The construction of the natural gas pipeline to Kumasi and the gas processing plant in Prestea will have significant economic and environmental benefits not only for Genser but also for Ghana and the West African sub-region”, Genser explains. “The availability of cheaper and readily accessible piped natural gas in Kumasi and the central belt of Ghana via the new pipeline will encourage industries to switch from imported trucked diesel and heavy fuel oil (HFO) to indigenous natural gas as a low-carbon intensive fuel. The pipeline will also support relocation of power plants from coastal regions to reduce line losses and improve efficiency on the national grid. Moreover, the gas conditioning plant will produce cleaner fuels and establish Ghana as a significant producer and exporter of Natural Gas Liquids (NGLs)”.

The senior loan facility was financed by a consortium of regional & commercial international banks, development financial institutions, and funds comprised of Standard Bank of South Africa, Absa Bank, Société Générale, Mauritius Commercial Bank, Ninety One, Barak Fund SPC Limited and the Development Bank of Southern Africa. The mezzanine loan facility is provided by Trafigura, Barak Fund SPC Limited and the US Based Fund, Trilinc Global Sustainable Income Fund Master Ltd.

The transaction will support Genser’s diversification from power to the gas midstream sector and mark a significant milestone in its decarbonization strategy to achieve net zero carbon by 2035 whilst contributing significantly to Ghana’s national climate change targets on emission reduction.

Genser Energy was advised in this transaction by Northcott Capital Limited as financial advisers and Clifford Chance LLP as legal advisers. The Senior Lenders were advised by Trinity International LLP (Legal), Advisian – Worley Group (Technical) and Indecs Consulting Limited (Insurance). Hogan Lovells acted as Legal counsel to the mezzanine Lenders.

Genser’s new lenders include Société Générale, Mauritius Commercial Bank and Ninety One, as well as Trafigura as an investor and strategic partner. Among the company’s old and existing lenders are Standard Bank of South Africa, Absa Bank, Barak Fund SPC Limited and the Development Bank of Southern Africa..

 


Angola Takes FID on its First Non-Associated Gas Project

The New Gas Consortium in Angola has reached Final Investment Decision for the Quiluma and Maboqueiro gas project, the first non-associated gas project in the country.

The project includes two offshore wellhead platforms, an onshore gas processing plant and a connection to Angola LNG plant for the marketing of condensates and gas via LNG cargoes. Project execution activities will start in 2022 with a first gas planned in 2026 and an expected production of 330Million standard cubic feet of gas per day (330MMscf/d) at plateau

The New Gas Consortium (NGC) includes ENI, Chevron, Sonangol P&P (the state hydrocarbon company),  bp and TOTALEnergies, together with Angola’s National Agency for Oil, Gas and Biofuels ANPG (the regulator and concessionaire)

“The sanctioning of the Q&M Project is an important milestone towards unlocking new undeveloped sources of energy, sustaining a reliable supply of gas to the Angola LNG plant”, the partners say in a statement.

The New Gas Consortium partnership encompasses ENIi (25.6%, operator), Chevron (31%), Sonangol P&P (19.8%), bp (11.8%) and TOTALEnergies (11.8%).

Angola had struggled with a clear framework for gas development, for most of its hydrocarbon exploitation history. It wasn’t until the last five years, that the country developed principles to ensure private sector take in natural gas development.

“The establishment of a legal and fiscal regime applicable to the upstream activities and sale of natural gas in Angola was a key enabler for the project”, the NGC partners explain.

The NGC, through the is project, has a relationship with the Angola LNG (ALNG) group stakeholders. Like the NGC, Chevron again holds the highest stake in ALNG, with 36.4%, Sonangol (22.8%), bp (13.6%) and TOTALEnergies (13.6%) and ENI (13.6%), The plant is located in Soyo, Province of Zaire and has a treatment capacity of approximately 353Billion cubic feet a year of feed gas and a liquefaction capacity of 5.2Million metric tonnes a year of LNG.

 

 

 

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