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Baker Hughes to Supply Equipment for Venture Global’s 100 MTPA LNG Expansion

Venture Global LNG has announced its long-term expansion plan to increase production from 70Million tonnes per annum (MMTPA) to more than 100MMTPA of nameplate LNG export capacity.

To support this initiative, Venture Global will significantly utilize Baker Hughe’s equipment.

The two companies: Venture Global and Baker Hughes have executed an expanded master equipment supply agreement for the delivery of additional liquefaction train systems and power island systems for Venture Global’s future LNG export projects. The expanded agreement was announced on the margins of Gastech in Singapore in the presence of Venture Global CEO Mike Sabel and Baker Hughes Chairman and CEO Lorenzo Simonelli.

Venture Global  says that “Cargoes originating from its Calcasieu Pass project have been delivered to 24 countries and accounted for approximately 10% of the LNG exported from the United States to Europe in 2022 and 2023”.

The company has taken Final Investment Decision (FID) on both phases of its 20.0 MMTPA nameplate Plaquemines LNG facility, which is on target to produce first LNG in 2024. The project has received the first four liquefaction train modules (Blocks 1 and 2) and the roof will be raised on its third LNG storage tank. The company “expects to commence construction of its CP2 LNG facility later this year, following receipt of FERC authorization”, Venture Global explains in a statement. “To date, 9.25 MTPA of CP2 LNG’s 20.0 MMTPA nameplate capacity has been sold under 20-year sales and purchase agreements. Baker Hughes, as a strategic LNG-equipment supplier to Venture Global, provided comprehensive LNG technology solutions to the Calcasieu Pass LNG facilities, and will provide the same to the currently under-construction Plaquemines LNG facility.

“Venture Global is thrilled to announce our long-term plan to expand LNG production both in and outside of Louisiana, building on the momentum of our first three projects – Calcasieu Pass, Plaquemines LNG and CP2 LNG,” said Mike Sabel, CEO of Venture Global. “Now more than ever we are committed to our mission of delivering low-cost LNG at a larger scale to support the world’s growing demand for energy security, prosperity, and environmental progress.”

 

 


Cameroon Rejects Operator’s Plan For Gas Price Hike to >$8/Mscf

By Jackson Atoumba, in Yaunde

The proposal by Gaz du Cameroun’s (GDC) to increase prices paid for natural gas by its customers has faced continued stonewalling by the country’s authorities.

GDC holds a monopoly on the processing and supply of natural gas –used by industrial companies as a backup energy source amid repeated power outages in Cameroon.

The company, a wholly owned subsidiary of the British independent Victoria Oil and Gas, had threatened to cut supply to any of its clients, made up of some 30 industrial companies in Douala, Cameroon’s leading commercial city, that are opposed to its new pricing as of September 1, 2023, at 8 a.m.

Some of its customers are Guiness, the beer maker, Dangote, the cement manufacturer, Prometal, an engineering fabrication firm and OK Foods.

GDC currently charges over $6.75 per thousand standard cubic feet ($6.75/Mscf) of natural gas supplied from its processing plant. The increase will push the price above $8/Mscf.

The government has refused. Cameroon’s Minister of Trade Luc Magloire Mbarga Atangana, argues that a unilateral increase of natural gas prices is contrary to the texts of the agreement between CDC and the Cameroonian state.

“I was informed of your supply suspension notice, effective September 1, 2023, for industrial natural gas consumers should they fail to pay the supplementary invoices issued by you, raising your prices by 20%”, Mr. Atangana wrote in an August 29, 2023 letter to CDC, his third such correspondence on the subject in six months.  “In this respect, I have the honour of reminding you of my letters (…) of May 30 and June 14, 2023, inviting you to fully comply with enforceable texts and consequently asking you to postpone any unilateral and uncoordinated measures to increase prices.”

Luc Magloire Mbarga Atangana’s letter also indicated that he had referred the matter for President Paul Biya’s arbitration. “I would also like to point out that this matter has been referred for the decision of the high command and that nothing can be done outside this scope without deliberately violating the relevant texts and rules,”.

Mr. Atangana accuses GDC of non-compliance with enforceable regulations concerning industrial gas prices in the domestic market, invoking the provisions of Decree no. 2023/232 of May 4, 2023, laying the implementing guidelines of  Law no. 2019/008 of April 25, 2019, on the Petroleum Code. Both laws, taken together, subject an increase in the price of natural gas distributed in the domestic market to a prior approval process. That process requires economic operators wishing to increase the price of their goods to first submit the decision to the government along with all the documentation supporting their proposed decision.  GDC’s counter argument is that the company was not subject to the provisions of the 2019 Petroleum Code and its 2023 implementing decree, but is instead bound by the provisions of the investment agreement signed in 2009 with the Republic of Cameroon.

The Cameroonian government responds that the investment agreement between GDC and the Republic of Cameroon requires the company to negotiate any pricing decision with the government, through the National Hydrocarbons Corporation (SNH) and the Ministry of Mines, before implementing it in the domestic market.

 

 


Nigerian Regulator Publishes Gas Trading/Gas Exchange Regulations

The Nigerian Midstream and Downstream Petroleum Regulatory Authority has published regulations on gas trading and gas exchange.

The regulations, already gazette, are to—

(a) regulate the establishment and operations of gas trading and settlement exchange platforms;

(b) establish the principles for the secure, reliable and efficient trading and settlement of natural gas and other gas commodities; and

(c) promote and sustain the efficient and robust gas trading, exchange and settlement of natural gas and other gas commodities.

These Regulations shall apply to activities connected to the establishment of secure, reliable and efficient trading and settlement systems for natural gas and other gas commodities on exchange platforms regulated by the Authority.

Those qualified to participate in a gas trading and settlement exchange are —

  • exchange operators; (b) natural gas transmission line operators; (c) gas producers ; (d) gas aggregators ; (e) gas shippers ; (f ) wholesale gas suppliers, gas distributors, gas retailers and wholesale gas consumers ; (g) gas facilities and terminals or gas importers ; (h) network operators ; (i) clearing houses ; (j) participants of the exchange ; (k) members of clearing house ; (l) gas transporters ; (m) gas storage providers ; (n) gas exporters ; (o) any other party transacting on the exchange ; and (p) potential exchange participants.

The Authority may initiate action for market coupling of a gas exchange with another exchange, where a commodity, which is produced by utilising gas as a major input, is traded, to minimise the risk to a producer of such commodity. The Authority may extend applicability of these Regulations, with or without modifications, to derivatives, forward and future contracts in respect of such commodities and services. The NMDPRA may also allow contracts at the gas exchange denominated in foreign or local currencies. The Authority shall approve new contracts introduced by the gas exchange in these Regulations.

For approval of new contracts, the Authority may examine intra-day, day-ahead, term-ahead contract and other like contracts; price discovery methodology and proposed matching rules; (c) transaction period ; (d) risk management mechanism ; (e) margin mechanism ; (f ) final price settlement mechanism ; (g) gas delivery mechanism ; (h) delivery duration ; and (i) penalty for contractual deviation.

The Authority, after granting the gas exchange an opportunity of being heard, may by order, suspend or withdraw transactions on any contract from the gas exchange and issue any consequential directive as deemed necessary..

A gas exchange shall adopt market design and propose contract specifications, keeping in view the following principles — (a) price discovery mechanism shall ensure fair, neutral, competitive and efficient prices ; (b) the bidding mechanism may be auction or as continuous ; (c) contract design shall be such so as to increase liquidity ; and (d) the physical market design and pipeline operations shall comply with the guidelines and regulations provided by the Authority.

Fuller details of the Nigerian Gas Exchange Regulations are on the…


Ghana to Pay $2.9/MMBTU for Jubilee Field Gas

Tullow Oil has agreed to charge the Government of Ghana a sum of $2.9 for every million British Thermal Units (MMBTU), or about a thousand cubic feet of gas, supplied from the Jubilee and TEN fields, located offshore the country.

“The pricing remains lower than the weighted average price of other sources of gas in Ghana, underscoring Tullow’s commitment to the economic development of its host nation”, the UK listed firm says in a statement.

Tullow pumps about 100Million standard cubic feet a day (100MMscf/d) of raw, unprocessed natural gas, from deep offshore wells to the Gas Processing Plant, an onshore processing facility in Atuabo, from where the lean gas is pumped to the Takoradi Distribution Station (TDS).

As part of the agreement with the government, the state never paid for that gas for the seven years of supply. That is the agreement that is being amended.

The value of $2.90/MMBTU, “utilises the price for Jubilee gas referenced in the 2017 Jubilee Plan of Development”, Tullow declares.

The amended agreement is expected to continue until the end of the third quarter of 2023. An agreement on acceptable commercial terms for export of future long-term volumes of Jubilee and TEN gas is in progress for completion by that time.


Saipem Wins $1Billion Contract for a Libyan Gas Project

Italian engineering firm Saipem a has been awarded a new contract by Mellitah Oil & Gas B.V. Libyan Branch, a consortium formed by National Oil Corporation of Libya and ENI North Africa, for the development of the Bouri Gas Utilisation Project (BGUP), worth approximately $1Billion.

Saipem will undertake revamping of the platforms and of the facilities of the Bouri gas field, which lies in water depths between 145 m and 183 metres, offshore the Libyan coast. The contract entails the engineering, procurement, construction, installation and commissioning (EPCIC) of an approximately 5,000-ton Gas Recovery Module (GRM), onto the existing DP4 offshore facility, together with the laying of 28 kilometres of pipelines connecting the DP3, DP4 and Sabratha platforms.

The main lifting operations will be executed by the semi-submersible crane vessel Saipem 7000. With this award, Saipem confirms its commitment and competitive positioning offshore Libya. The completion of the project will make an important contribution to reducing CO2 emissions in Libya.

Saipem reports the transaction as a “related party transaction”, pursuant to Article 6 of the Consob Regulation on related party transactions, since ENI S.p.A. jointly controls both Saipem and Mellitah Oil & Gas B.V.

Saipem is involved worldwide in the engineering and construction of major projects for the energy and infrastructure sectors, both offshore and onshore.


Fuel Subsidy: Nigeria Chooses CNG as Alternative Fuel for Mass Transit

By Fasilat Oluwuyi, Reporter, Energy Access

Nigeria’s president, Bola Ahmed Tinubu, has disclosed plans to roll out 3,000 units of Compressed Natural Gas (CNG) buses to cushion the effect of the fuel subsidy removal on Nigerians.

Tinubu disclosed this in a 20-minute televised broadcast addressing the state of the nation July 31, 2023.

The idea is that the cost of fueling buses with CNG is a way cheaper than gasoline prices which have risen 300%fold since subsidy was removed on May 29, 2023.

The president said that the buses would be rolled out across the state and local government in the country for mass transit at a cheaper rate.

Provision has been made for an investment of ₦100Billion to acquire the 3,000 units of the 20-seater CNG buses between August and March 2024, Mr. Tinubu explained.

It would seem that President Tinubu’s plan assumes that CNG will be the alternative mass transit fuel all over the country.

Felix Ekundayo, President of the Nigerian Liquefied Petroleum Gas Association, says that whereas CNG would be value -efficient in the south, it will be quite expensive to deliver it for mass transit in the north.

President Tinubu said on the broadcast: “Part of our programme is to roll out buses across the states and local governments for mass transit at a much more affordable rate. We have made provision to invest ₦100Billion between now and March 2024 to acquire 3,000 units of 20-seater CNG-fuelled buses.

“These buses will be shared to major transportation companies in the states, using the intensity of travel per capital. Participating transport companies will be able to access credit under this facility at 9% per annum with 60 months repayment period.”

Tinubu said the subsidy has outlived its usefulness hence the removal. He added that the removal of the subsidy, has saved the country over a trillion naira.

” In a little over two months, we have saved over a trillion naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters. That money will now be used more directly and more beneficially for you and your families.

“Sadly there was an unavoidable lag between subsidy removal and these plans coming fully online. However, we are swiftly closing the time gap. I plead with you to please have faith in our ability to deliver and in our concern for your well-being.

“We will get out of this turbulence. And, due to the measures we have taken, Nigeria will be better equipped and able to take advantage of the future that awaits her.”

 

 

 


Morocco Increases its Gas Import from Spain as Algerian Supply Disappears

Mohammed Jetutu, in Cairo

Morocco imported about 90Million cubic feet of gas per day (90MMscf/d) from Spain in May 2023, a fourth consecutive monthly record from its European neighbour.

The volumes were less than the 105MMscf/d that the North African kingdom used to receive from Algeria, for the purpose of firing its Combined Cycle Gas Turbines (CCGT).

Hydrocarbon starved Morocco has struggled with its gas to wire projects since Algeria stopped exporting piped gas to the kingdom through the Gazoduc Maghreb Europe (GME) pipeline in October 2021.

Algeria continues to pipe gas to Spain through the Medgaz line, a second route.

But the molecules from Spain to Morocco are redirected LNG imports, which are piped to Morocco via the reversal of the same GME pipeline that used to ferry the Algeria-Morocco-Spain volumes.


Maximum Gas Price of $6.5 Per Thousand Cubic Feet “Not Excessive”, Sasol Tells South African Regulator

By Toyin Akinosho, Publisher

South African energy producer Sasol has disagreed with “the preliminary conclusion by the National Energy Regulator of South Africa (NERSA) that the maximum price of R120/GJ applied for by Sasol Gas for full year 2023 is excessive”.

Of the volume imported into South Africa from Mozambique through a pipeline inaugurated 19 years ago, Sasol sells 161Million standard cubic feet per day (MMscf/d) of natural gas to domestic customers. Those charges are regulated by NERSA.

120 Rand per Gigajoule amounts to $6.5/ thousand standard cubic feet (Mscf), or $6.5/Mscf. Full Year 2023 (FY 2023), in South Africa, refers to July 1, 2022 to June 30, 2023.

Gas prices in Africa’s domestic market haven’t been affected by the volatility in Europe and Asia in the last two years. Egypt’s regulated gas prices range from around $12/ Mscf for cement production to as low as $3/Mscf for electricity generation.  In Ghana, Italian producer ENI charges the government around $9/Mscf for gas delivered from the country’s Sankofa field, supplied mostly for power generation. In Nigeria, upstream gas producers are allowed to charge around $2.2/Mscf from electricity generating companies, whereas in Tanzania, power producers pay up to $3/Mscf.

Sasol Gas’ customers include Consol Glass; Brochem, a chemical manufacturer; Mondi, a paper maker; the aptly named PFG Building Glass; Ceramic Industries; Ilovo Sugar and others. The company admits, in its latest report (July 11, 2023), that “natural gas and methane rich gas sales volumes in South Africa were 3% and 1% lower respectively when compared to the prior year due to lower customer demand”.

But of the maximum gas price, Sasol “maintains that apart from operational cost increases, NERSA also has to take into account the risk associated with extensive investments which Sasol is currently making to extend supply and the incentives to develop new resources”, the company notes in a statement. “Furthermore, the alternative value for Sasol is that it has the ability to convert gas into other value-added products in its South African facilities, as an alternative to selling this gas to third party customers”.

NERSA published Sasol Gas’s Amendment Maximum Gas Price (MGP) Application for FY2023 and published its Consultation Document. It has also published Sasol Gas’s MGP application for the period July 1, 2023 to June 30, 2024 (FY2024) together with its Consultation Document.

“This pricing application has followed the cost plus 2023 MGP methodology, which NERSA published in February 2023”, Sasol declares in the press statement.

Sasol says it welcomes the progress in its MGP application process, “and is optimistic that the approval of an appropriate maximum gas price for the FY2023 period will recognise the interests of consumers, while enabling the viability of the supply of gas in South Africa”.

Sasol Gas has continued to charge customers at $3.65/Mscf or R68.39/GJ from FY2022, “notwithstanding the additional expenditure and cost increases exceeding 40% that Sasol has faced during this period. To date, Sasol has invested over $300Million in capital expenditure since 2021 to maintain gas supply from Mozambique to 2026”.

Sasol notes that an MGP needs to be fair and enable ongoing investment in new sources of gas supply. “During the course of 2022, it became apparent that the MGP would increase dramatically, due to international gas hub prices increasing on the back of post COVID-19 demand, the war in Ukraine and weather conditions affecting gas demand.

“These (external) factors were projected to increase the MGP, determined according to the international gas benchmark 2020 MGP methodology, to R273,43/GJ (or $15/Mscf) for FY2023.

Sasol Gas engaged extensively with NERSA about appropriate pricing in accordance with the then applicable 2020 MGP methodology. These engagements continued throughout 2022 and resulted in NERSA requiring Sasol to bring a formal price application to resolve the matter.

“Gas price regulation in terms of the Gas Act is aimed at determining a competitive price for gas and should strike a balance between the interests of gas suppliers and consumers, while fostering the viability of the supply in South Africa and investment in new sources of supply”, Sasol rigorously argues.  “Sasol’s investments over the past 20 years have offered consumers an alternative energy supply, thereby enhancing competition, consumer choice and, importantly, fostering economic activity and investment in the South Africa economy”.

Sasol says it will “continue its engagement in the commentary phase of the FY23 price application and trusts that NERSA will duly fulfil its mandate to determine an appropriate, reasonable and competitive gas price for FY23 in the interests of consumers and gas supply in South Africa”.

Sasol remains committed to complying with all applicable regulations and cooperating with relevant authorities throughout this process.


ENI Delivers LNG From Algeria to a New Italian Terminal

Italian major ENI has reported delivering a gas cargo of 3.1Billion cubic feet from Algeria to the SNAM regasification terminal in Piombino, Italy.

Unloading operations took place following the completion of the test phase and mark the beginning of the terminal’s commercial operation.

“The cargo was produced at the Sonatrach liquefaction plant in Betihoua, Algeria”, ENI says in a release. The partnership with Sonatrach and Algeria plays a central role in ENI’s strategy to diversify supplies and expand its gas portfolio, with investments in fast-track projects that will increase available volumes for the Italian and European markets”, it explains.

ENI is bullish on Algerian assets as evidenced by its recent $4.9Billion acquisition of a piece of Neptune Energy, which holds large gas properties in Algeria, including the Touat gas project, a joint venture with Sonatrach and ENGIE, considered an important source of supply for mainland Europe. Groupement Touat Gaz consists of Neptune Energy Touat (65%) and Sonatrach (35%).

“ENI targets growth in its LNG activities with contracted volumes expected to rise to over 18Million tonnes in 2026, more than double that of 2022. It is an important component of a reshaped global gas portfolio that will contribute to the security of supply and increasingly leverage equity production”.


NMDPRA Gazettes Regulation on Gas Transportation Tariff

Nigerian Midstream Downstream Petroleum Regulatory Agency has gazetted a number of regulations under the Petroleum Industry Act (PIA), a key one of which is on Gas Transportation Tariff.

The regulation says that Shippers (“Shipper” means a person other than an operator licenced by the Authority to ship gas through a system) shall be charged transportation tariff for capacity charge, commodity charge and any other charge as may be prescribed by relevant code.

(2) The transportation tariffs shall be determined and charged in United States Dollars or other foreign currency, and payment shall be made in such respective foreign currency or its Naira equivalent at the open market rate published by the Central Bank of Nigeria.

(3) Transportation tariff shall be paid by shippers on monthly basis in arrears.

(4) Notwithstanding regulation 6(2) of these Regulations, the provisions of the Gas Network Code Framework Agreement shall apply.

(5) A gas transportation agreement existing under a gas transportation pipeline on open access or gas transportation network, shall from the commencement of these Regulations cease to be effective and is replaced by a gas network code framework agreement.

(6) For the purposes of this regulation — which is the (a) “capacity charge” means a charge determined by the amount of a shipper’s registered system entry capacity at a system entry point, or registered system exit capacity at a system exit point and payable by the shipper irrespective of whether the reserved capacity is utilised or not; and (b) “commodity charge” is a charge determined by the quantity of gas flow at a system point attributed to a shipper that varies in direct proportion to actual throughput of natural gas by a shipper. 4.—(1) The Authority may approve different classes of capacity charge for the same gas transportation pipeline or gas transportation network. (2) The classes of capacity charge under regulation 7(1) of these Regulations may be determined —(a) with reference to gas transportation networks and gas transportation pipelines on open access, —(i) types and industries of the end-users of the natural gas transported by shippers, based on the criteria approved by the Authority, (ii) agreements with shippers facilitating the financing of new gas transportation pipeline, and (iii) other basis as may be approved by the Authority ; (b) with respect to gas transportation pipelines for its own account of an operator.

 

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