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Coral Sul FLNG Arrives Mozambican Waters

The Coral Sul Floating Liquefied Natural Gas (FLNG) Vessel has entered Mozambican waters, 45 days after it set sail from the Samsung Heavy Industries shipyard in Geoje, South Korea.

It will be moored at its operating site in the Rovuma basin offshore Mozambique. The FLNG will receive feedstock from the Coral gas field in the Area 4 of the deepwater Rovuma Basin in the Indian Ocean. Italian major ENI discovered Coral back in May 2012. The field holds about 16 Trillion cubic feet (Tcf) of gas in place.

Following the mooring, hook-up operations will begin at a water depth of around 2,000 metres.

Production startup, scheduled for the second half of 2022, may now be earlier. Coral Sul FLNG will contribute to increase gas availability in a tight market, with a gas liquefaction capacity of 3.4Million tons per year (MTPA) of gas. BP will buy all of the LNG produced at the unit as part of a long-term deal.

The 432 metre long and 66-metre-wide unit was constructed by the TJS consortium, consisting of Technip Energies, JGC Corp, and Samsung. It is the first floating LNG facility ever to be deployed in Africa’s deep waters, but it is the second FLNG on the continent, coming after the Hilli Episeyo, the 2.4MMTPA floater in shallow waters off Cameroon’s Kribi coast.

Italian major ENI operates the Coral Sul (South) project on behalf of the Area 4 partners.

These include Mozambique Rovuma Venture, a firm owned by Eni, ExxonMobil and China´s CNPC, Galp, Kogas and (the state hydrocarbon firm) Empresa Nacional de Hidrocarbonetos (ENH).

The Coral South Project achieved Final Investment Decision in 2017, only 36 months after the last appraisal well. “FLNG fabrication and construction activities started in 2018 and were completed on cost and on time, despite the pandemic”, ENI has always maintained.


TOTAL Reopens Office in Gas Rich Cabo Delgado

TOTALEnergies has opened an information office in the city of Pemba, in the gas-rich Cabo Delgado Province in Mozambique.

With this move, the company is gradually effecting a return, nine months after suspending its activities in the Afungi Peninsula, after an Islamist militant attack in the nearby town of Palma in March 2021, in which dozens of people were killed.

Afungi Peninsula is the site of TOTALEnergies’ proposed 13Million Tonnes Per Annum Liquefied Natural Gas LNG plant. 

The new information office in Pemba is 125 kilometres south of the Palma district.

A multinational force comprising troops from Rwanda and soldiers from countries in the Southern African Development Commission (SADEC) region has repelled the insurgents from many of their bases in the province, but the rebels have spread out and now conduct guerilla-style attacks. 

The office is expected to ease communication between interested parties in the LNG project.


LNG Supply: Turkey Pivots from Nigeria to Egypt

Seven Egyptian Liquefied Natural Gas cargoes have been shipped to Turkey since October 2021, the same month that the latter country ended its contract with Nigerian LNG.

There are no indications that Botas, the Turkish state hydrocarbon company with which NLNG signed the expired contract, has a contract with Egypt.

Turkey and Egypt re-established formal diplomatic relations in early 2021, almost eight years after they were broken off following the military coup that ousted Egypt’s first Islamist president Mohamed Morsi.

An S&P Platts Global report declares that Botas has held a number of tenders for spot LNG cargoes in recent months, and is believed to have secured some supplies although exact volumes and delivery dates are not clear.

“Turkey is set for record high gas demand in 2021 — of as much as 2 Trillion Cubic Feet — on the back of strong consumption in the power sector, and”, the S&P Platts report adds…” …it is facing the prospect of more of its long-term import contracts expiring in the near future …with one long-term LNG contract in place — with Algeria’s state-owned Sonatrach — that is due to run until 2024, but otherwise has been taking cargoes mostly from the US and Qatar”.


Egypt’s LNG Exports in Full Throttle

By Toyin Akinosho

Egypt is capitalizing on the surge in natural gas prices overseas by exporting the equivalent of around 1.6Billion cubic feet per day (1.6Bcf/d), from its two LNG Terminals. 

“Egyptian gas has played a role in securing Europe’s energy needs … The liquefaction units are now operating at full capacity as we try to maximize our natural gas exports in light of the rise in international gas prices,” Tarik El Molla, the country’s Minister of Petroleum, said on the sidelines of the East Mediterranean Gas Forum ministerial meeting in Cairo.

At least 75 LNG shipments have been shipped so far in 2021 — a huge jump after having only shipped 24 during the whole of last year. As of the second week of November, more than eight gas shipments had departed from Egypt in 4TH Quarter 2021., data from S&P Global Platts indicate.

Egypt’s gas production fortunes slumped in the early to mid-2010s while domestic consumption rose, forcing the country to halt LNG export.

But in late 2015, ENI discovered Zohr, the giant gas field (> 22Tcf), in the deepwaters of the Mediterranean and gradually reclaimed its role as a net exporter of LNG. The country’s total natural gas output currently ranges between 6.5 and 7Bcf/d, Mr. Molla told the EMGF ministerial meeting.


Golar & Partners to increase Cameroon’s LNG Production to 1.4MMTPA

GNL Golar and its partners Perenco and the National Hydrocarbons corporation SNH plan to increase floating LNG plant Hilli Episeyo’s yearly production capacity from 1.2Million to 1.4 Million tons in 2022. 

The plant monetizes gas from the Sanaga Sud field, in MLHP-4 Block in the offshore area of the central Douala Basin. 

Commissioned in 2018, FLNG Hilli Episeyo has 2.4Million tonnes of liquefaction capacity. 

Golar says that the plant has delivered 100 percent commercial uptime since first gas in 2018.

According to the agreement binding the parties, Perenco and SNH have the option to increase the production capacity by an additional 200,000 tons yearly from January 2023 to 2026, which marks the end of the current contract. 

Should the parties decide to go this route, they will confirm it in Q3-2022.

Perenco and SNH intend to assess the potential of two to three additional gas wells and start drilling them this year in a bid to increase the upstream capacity in 2022 in preparation for the production.


N-Gas’ Profit Jumps by >50%, Despite No Increase in WAGP Export

By Toyin Akinosho

NNPC’s 62.35% owned gas delivery subsidiary N-Gas recorded a leap in profit from $6.217Million in 2019 to $9.532Million in 2020.

Most of the profit came, not from gas delivery, but from difference in Finance cost between 2019 and 2020, according to 2020 Annual report by N-GAS, one of the 21 NNPC subsidiaries whose audited reports were published in September 2021.

Finance cost was higher in 2019: $5.13Million, than in 2020: $1.88Million. This made all the difference in terms of profit after tax in 2020.

In terms of gas delivery itself, 2020 volumes were slightly lower than 2019 supplies, but that reflected extensive pigging operations in the pipeline in the first few months of the year.

N-Gas is jointly owned with NNPC by Chevron and Shell and its work is to purchase and deliver Nigerian gas to customers in Benin Republic, Togo and Ghana, through the West African pipeline.

This means that it pays upstream suppliers like NDWestern and NPDC for taking their gas and pays the pipeline owners for ferrying the gas through the line.

The bulk of the revenue should be from the delivery charges on sale of gas to Volta River Authority (VRA) and Communaute Electrique du Benin- Lome/ Cotonou (CEB) under their respective gas sales agreements, but that’s not what happened.

 

N-Gas Limited was incorporated in 2004 as a private limited liability Company. The Company is jointly owned by the Nigerian National Petroleum Corporation (62.35%), Chevron N-Gas Limited (20.00%) and Shell Overseas Holdings Limited (17.65%). The Company’s main activity is to buy and sell natural gas shipped through the Escravos-Lagos Pipeline System (ELPS – NGC) and the West African Gas Pipeline (WAGP) to its customers in the countries of Ghana, Togo and Benin.

N-Gas has executed agreements with upstream producers in Nigeria (Chevron Nigeria Limited Joint Venture (CNL-JV) and Nigerian Petroleum Development Company/ND Western Joint Venture (NPDC/NDW-JV)) and with gas transportation companies (Nigerian Gas Company Limited (NGC) and West African Petroleum Company (WAPCo) ) for the supply and transportation of gas to its customers. The agreement with NPDC/NDW-JV was previously with Shell, ie SPDC-JV but subsequently novated to NPDC/NDW-JV following the divestment of Shell Petroleum Development Company Joint Venture (SPDC-JV) from the asset that is the source of its upstream gas supplies to N-Gas. The Novation agreement which transferred the rights and obligations of the NNPC/SPDC JV parties to NPDC/NDW JV parties in the NNPC/SPDC GPAs, was finally concluded in December 2014 following the execution of the novated Trust Accounts and Security Deeds (TASDs),

The dividend paid to shareholders in 2020 was $6Million, same as in 2019. In both years, NNPC received $3.741Million as dividend; Chevron received $1.2Million and Shell received $1.059Million.

Originally published in the September 2021 edition of Africa Oil+Gas Report and distributed to paying subscribers.


Coral-Sul FLNG Begins Sail Away from South Korea to Mozambique

Italian operator ENI has held the naming and sail away ceremony of the Coral-Sul floating LNG (FLNG) at Samsung Heavy Industries shipyard in Geoje, South Korea.

The FLNG, which is part of the Coral South Project, will be now towed and moored at its operating site in the Rovuma basin offshore Mozambique. Production startup is expected in the second half of 2022, and it will contribute to increasing gas availability in a tight market.

FLNG treatment and liquefaction installation has a gas liquefaction capacity of 3.4Million tons per year (MTPA) and will put in production 450Billion cubic metres of gas from the giant Coral reservoir, located in the offshore Rovuma Basin.

Partners, with ENI, on the project, include ExxonMobil, CNPC, GALP, KOGAS, and ENH. The event took place, in the presence of the Mozambican President, Filipe Jacinto Nyusi, and Moon Jae-in, President of the Republic of Korea.

The Coral South Project achieved Final Investment Decision in 2017, only 36 months after the last appraisal well. “FLNG fabrication and construction activities started in 2018 and were completed on cost and on time, despite the pandemic”, ENI says in a statement. While performing the construction activities in Korea, several significant activities were undertaken in Mozambique, with full support from the Mozambican Authorities, including the ultra-deepwater (2000 metres water depth) drilling and completion campaign that involved the highest technological and operational skills and equipment.

“The Coral South Project will generate significant Government takes for the Country while creating more than 800 new jobs during the operation period.

“The Coral Sul FLNG is 432 metres long and 66 metres wide, weighs around 220,000 tons, and has the capacity to accommodate up to 350 people in its eight-story Living Quarter module. Once the FLNG facility will be in place, the installation campaign will begin, including mooring and hook-up operations at a water depth of around 2,000 metres by means of 20 mooring lines that totally weigh 9,000 tons.

About Area 4

Area 4 is operated by Mozambique Rovuma Venture S.p.A. (MRV), an incorporated joint venture owned by Eni, Exxon Mobil, and CNPC, which holds a 70 percent interest in the Area 4 exploration and production concession contract. In addition to MRV, Galp, KOGAS, and Empresa Nacional de Hidrocarbonetos E.P. each hold a 10 percent interest in Area 4. ENI is the offshore Delegated Operator and is leading the construction and operation of the floating liquefied natural gas facility on behalf of MRV.


Algeria Has Ended Its Gas Export to Spain via Morocco

Algerian gas exports to Spain via Morocco have ended.

The contract for Algeria to use the Moroccan section of the Gaz-Maghreb Europe (GME) pipeline to pipe gas to the Iberian Peninsula ended on 31 October, without a new agreement in place for its continued use.

The contract to deliver Algerian gas to Spain and Portugal via Morocco, the 406Billion Cubic Feet Per Year GME pipeline ran for 25 years. The line stopped flowing on November 1, 2021, not out of  any technical challenges, but due to the frosty relations between the hydrocarbon rich Algeria and  hydrocarbon starved Morocco.

In late August 2021, Algeria severed diplomatic ties with  Morocco, over what Ramtane Lamamra, the Algerian foreign minister, called “hostile, unfriendly and malicious actions against our country.”

Morocco responded that though the decision was “expected,” the allegations are “absurd.”

It is unclear whether Algeria will cease exporting gas to Spain, a crucial part of its income, or it would export into Spain through other means.

 


Rumours of ExxonMobil Dumping Moza Gas Project are Exaggerated, Government says

Mozambican authorities say that ExxonMobil has assured them it would continue with its natural gas projects in the north of the country.

Max Tonela, Mozambique’s Minister of Mineral Resources and Energy, says that he and his men have been exchanging information with the US major “and the indication we got was to reaffirm the Afungi project”.

The government is expecting ExxonMobil representatives to visit Maputo in early November 2021, to assess the situation in relation to projects in Mozambique.

ExxonMobil has been quiet about the 15Milllion Metric Tonne Liquefied Natural Gas (LNG) project in Area 4, which it leads. The company had, by 2019, “awarded a contract for the engineering, procurement and construction for the Rovuma LNG onshore liquefied natural gas production complex to a consortium made up of JGC, Fluor and TechnipFMC (JFT)”, it said in a statement which is still on its website. “The award enables the start of activities for the Rovuma LNG project, as approved by the government of Mozambique in June 2019, while the Area 4 partners continue to work toward a final investment decision (FID) in 2020”.

The FID didn’t happen, and of the three majors involved in LNG projects in the country, ExxonMobil is the only one that has not said a word about going forward or cancelling. That silence has bred speculations o about the company’s plans.

The World Street Journal sounded very authoritative in a report in late October 2021, that ExxonMobil Corp board was “debating whether to continue with several major oil and gas projects amid a global push from investors for fossil fuel companies to be more cost-conscious and green-energy friendly”. It said the “board members expressed concerns about …a $30Billion liquefied natural gas development in Mozambique and another multibillion-dollar gas project in Vietnam”. I added that “the annual projected emissions from the Mozambique and Vietnam projects were among the highest in Exxon’s planned pipeline of oil and gas projects, according to a pre-pandemic internal analysis by Exxon, which was reviewed by the paper”.

ExxonMobil has already spent $2.8Billion to acquire its operator role and equity in the Area 4 project. But the immediate pretext for slowing down has been the flare up of terrorism in the natural gas rich Cabo Delgado province. 2020 witnessed a high mark in violent attacks claimed by the extremist group Islamic State which had been growing since 2017.The conflict has led to more than 3,100 deaths, according to the ACLED conflict registration project, and more than 817,000 displaced people, according to Mozambican authorities.

Since July, an offensive by government troops with support from Rwanda which was later joined by the Southern African Development Community (SADC) allowed for increased security, recovering several areas where there was rebel presence, including the town of Mocímboa da Praia, which had been occupied since August 2020.


Our Latest Edition: AFRICA/ Stepping on The Gas Annual 2021

Africa is in a far better place, today, with gas monetization initiatives, than it was a year ago, in October 2020.

The demand in Ghana, driven by the rise in electricity generation, is expected to rise from the 2020 level of 313Million standard cubic feet per day (313MMscf/d) to some 450MMscf/d.. by 2026. This is an astronomical leap for a country that wasn’t consuming natural gas 11 years ago.

Algerian natural gas output has surged after a 36 month plunge, reaching  10.64Billion standard cubic feet per day (Bsc/d) of sales gas in the first five months of 2021, up 30% year-on-year. More than 4Bscf/d is consumed in the domestic market.

Our latest edition, just released to our global pool of paying subscribers, covers the continent-wide growth and opportunity of the natural gas business.

TOTALEnergies retreated, in April 2021, from the construction site of Africa’s largest single gas monetisation project, in Mozambique.

Islamic insurgents, invading nearby Pemba district in March 2021, killing people, including dozens of  tourists, forced the European oil giant to call a Force Majeure on the 13Million Tonnes Per Annum (13MMTPA) Liquefied Natural Gas Plant.

But the French major didn’t cancel the project; the Mozambican government, undaunted, increased its security arsenal, invited Rwandan armed forces and a multinational SADC force composed of troops from Angola, Botswana, Lesotho, South Africa and Tanzania, to tackle the insurgency. The combined firepower has smoked out the jihadists from most of their camps and haunts. Now there’s frequent talk about TOTALEnergies returning to site by third quarter 2022.

Since our last STEPPING ON THE GAS ANNUAL, in 2020, there have been several encouraging news.  The 3.4MMTPA Coral South FLNG offshore Mozambique is confirmed to deliver first gas in 2022. In the same country, Sasol reached a final investment decision (FID) on the $760Million Temane natural gas project, which includes a 450 MW gas-fired power plant, a liquefied petroleum gas (LPG) facility and an increase in the volume of gas exported from Mozambique to South Africa. In the Ghanian port of Tema, TLTC, an LNG Terminal Company, received a regasification unit (RU) for its 1Million Metric Tonne Per Year project, which also comprises floating storage.

Nigeria has been on a roll: Construction is ongoing at the 8MMTPA Nigerian LNG Train 7. The 600MMscf/d ANOH gas project is cruising towards commissioning by mid-2022 and  AngloDutch Shell has agreed to supply 340MMscf/d to a proposed methanol and fertilizer plant in Odeama, a sleepy town in the Niger Delta region.

Meanwhile, Egypt’s gas demand has skyrocketed, hitting monthly records for each of the first six months of 2021 with the 6.07Bscf/d in 1H 2021 average up 9% on 1H 2020. That is a good problem. In this edition we take a survey of what’s exciting in African Gas.

The Africa Oil+Gas Report is the primer of the hydrocarbon and the growing new energy industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions, for useful analyses of Africa’s oil and gas industry. Published by the Festac News Press Limited since November 2001, AOGR is a monthly, publication delivered to subscribers around the world. Its website remains www.africaoilgasreport.com and the contact email address is info@africaoilgasreport.com. Contact telephone numbers in our West African regional headquarters in Lagos are +2348038882629, +2348036525979, +2347062420127, +2348023902519.

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