All articles in the Gas Monetization Section:

ENI Says It Can Replace Some Russian Gas with African Supplies

By Toyin Akinosho, Publisher

The Italian major ENI has reported that it could reduce its reliance on Russian gas to some extent with supply from its African assets.

Russia supplies approximately 20Billion cubic metres (or 706Billon cubic feet) on annual basis to ENI, the company said in an investor update. That comes to roughly 2Billion cubic feet of gas per day. ENI is under pressure to reduce its receipt of gas from Russia, given that country’s military campaign in Ukraine.

ENI said: “In case of reduction of Russian supply, ENI can leverage on the expansion of its equity gas production mainly in North Africa and West Africa as alternative supply sources”.

The statement specifically mentioned North Africa (meaning Egypt, Algeria) and West Africa (Nigeria, Congo, Ghana, and probably Angola).

ENI has huge gas assets in Egypt, but most of the output is used to satiate the population’s voracious appetite for natural gas: Egypt consumed close to 7Billion standard cubic feet per day last year, with a large proportion of it used as feedstock for its electricity generation of 55,000MW capacity.

ENI also has a relatively large output in Nigeria; on an operated basis it produces around 700Million standard cubic feet per day in the country (of which it has only 20% share) and holds a 5% stake in Shell operated 19 oil mining leases in Nigeria, many of which are gas prone.

In Congo Brazzaville, ENI has sanctioned two modular Liquefied Natural Gas (LNG) plants, but the volume (2Million Tonnes Per Annum) is too minuscule to be considered as part of alternatives to Russian supply.

ENI’s gas production in Ghana is also maxed out: the 180MMscf/d output from the Sankofa-Gye Nyame field is dedicated to the country’s domestic market.

In Cote D’Ivoire, ENI has sanctioned  fast-track development of a recently discovered, elephant sized deepwater hydrocarbon accumulation. The proportion of gas in the pool has not been disclosed.

Other European energy firms have announced exits from Russia since the hostilities began. Shell said it will pull out of Russia entirely, suspending the purchase of Russian crude oil and phasing out involvement in Russian hydrocarbons extending from oil to LNG. The company had already said it would exit its JVs with Russian state-owned gas producer Gazprom. BP also announced it would stop buying Russian energy after last week cutting ties with Rosneft.

ENI said in the investor update that it was responding to “numerous requests over the course of the past few days”.

ENI disclosed the following:

Gas is flowing normally from Russia as per contracted volume

  • Russia supplies approximately 20Billion cubic metres on annual basis to ENI,
  • In case of reduction of Russian supply, ENI can leverage on the expansion of its equity gas production mainly in North Africa and West Africa as alternative supply sources
  • Under extreme conditions, certain contractual protections (as force majeure clauses) and general legal coverage may be called.


Savannah Agrees to Deliver a Trickle of Gas to Axxela 

British gas producer Savannah Energy has agreed to supply a maximum of five million standard cubic feet per day (5MMscf/d) of gas to Axxela, a Nigerian ‘last mile’ gas distributor.

The gas will be delivered via Savannah’s Ikot Abasi Gas Receiving Facility in southeastern Nigeria and then via third-party gas infrastructure to Central Horizon Gas Company CHGC, a majority-owned subsidiary of Axxela in the Port Harcourt, the commercial hub in the east of the country.

Axxela supplies natural gas to over 185 industrial and commercial customers via its gas infrastructure network across cities in Southern Nigeria including Lagos and Port Harcourt.

CHGC operates a 17km gas pipeline infrastructure network with a throughput capacity of 50 MMscfpd, which provides natural gas to industrial and commercial customers in the Trans Amadi Industrial Area of Port Harcourt as well as the Greater Port Harcourt Area. 

The Gas Sales Agreement, GSA is initially for one year but is extendable by mutual agreement. First gas deliveries are expected to commence within the next 12 months and are dependent on CHGC completing certain works to connect to the third-party gas delivery infrastructure. Accugas is not expected to incur any additional capital expenditure in this regard.

TOTAL to Help Rwanda with LPG, Renewable Energy Solutions

TOTAL Energies says it has signed a Memorandum of Understanding (MoU) with the Rwandan Government to develop collaboration on projects related to energies.

The collaboration will be with the Rwanda Development Board, a public institution responsible for accelerating Rwanda’s economic development.

The scope of the agreement covers in particular:

  • The energy products distribution (including LPG, and electric charging),
  • The supply of LPG as a substitute for burning biomass,
  • The renewable hydro-electricity generation,
  • The development of power storage solutions for the electrical network,
  • The development of Natural Based Solution for carbon storage,
  • The implementation of education and training programs on new energies and the energy transition.

TOTALEnergies also announced the incorporation of a local branch TOTALEnergies Marketing Rwanda Ltd, and the opening of a permanent representation office in Kigali.

“The collaboration with TOTALEnergies in the energy sector, particularly the investment they will make in clean energy storage, distribution, partnerships with our private sector companies in Rwanda and beyond, is timely for a country that puts the environment at the heart of its development strategies. Additionally, the skills transfer in critical areas such as renewable energies and energy transition will undoubtedly contribute to the development of local expertise in the energy sector.” said Clare Akamanzi, CEO of the Rwanda Development Board.


Commissioning Hitches at NNPC’s Oredo LPG Plant: Upsets the Nigerian Government

By Macson Obojemuinmoin

Officials at the Nigerian presidency are concerned that the state hydrocarbon company, NPDC, got President Muhammadu Buhari to commission an LPG plant that failed to deliver more than a fraction of the capacity to the market a full year after the President inaugurated it.

NPDC is a subsidiary of NNPC. The second phase of its Oredo Integrated Gas Handling Facility (IGHF-2) in Edo state, in midwestern Nigeria, was commissioned four days to Christmas 2020, and billed to deliver 240,000 metric tonnes of commercial grade liquefied petroleum gas and propane to the domestic market, according to the speech by President Buhari himself.

He said that the plant would “meet 20% of Nigeria’s LPG demand”.

Mele Kyari, NNPC’s Group Managing Director, had promised at the commissioning “a daily load out of 17 trucks of LPG and 22 trucks of propane”.

That has not happened.

Commissioning hitches have hampered the efficacy of the facility and ensured only minimal benefit to the market a full year after the high-powered, widely publicized commissioning. Over half of the 1.2Million tonnes of LPG consumed in Nigeria in 2021 was imported. The Oredo Plant was supposed to boost locally produced LPG, most of which is contributed by Nigeria Liquefied Natural Gas NLNG Ltd (which supplied 400,000Tonnes, or 33% of the entire 2021 consumption).

As demand/supply challenges forced up the prices of the product for most of 2021, the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) fingered “inconsistent availability” of the product as a causative factor and called for a policy that “would encourage full domestication of LPG” , a phrase that could be translated as ‘full scale local production’.

Presidency sources say there is a robust campaign to bolster local production of LPG, with a list of projects that is topped by the Oredo Plant, which has now proved disappointing. They are also looking to contributions from Seplat/NGC’S ANOH gas project, Platform Petroleum”s Egaboma Plant, Energia’s Ebendo field and Sterling Exploration’s Kwale Hydrocarbons.

Of the lot, Kwale Hydrocarbons has started supplying the market and it is the next major local supplier after NLNG, although it doesn’t disclose its delivery volumes. LPG distributors interviewed by Africa Oil+Gas Report, have been largely disappointed by the effectiveness of Platform Petroleum”s Egbaoma Plant and Energia’s Ebendo project. The ANOH project is still under heavy construction, and it’s expected to come on stream in late 2022.

NLNG Is Supplying All its Butane Production to Nigeria in January 2022

Nigeria Liquefied Natural Gas (NLNG) Limited supplied its entire Butane (LPG) output to Nigeria’s domestic market in January 2022.

It is also supplying 50% of its propane production to the country (although its propane output is a minuscule fraction of the Butane production).

It is the first time the company would not export a single tonne of Butane. NLNG Ltd says it will do the same thing for Propane by January 2023, that is: its entire production of Propane will be supplied to the domestic market.

In 2021, the company increased its LPG supply commitment from 350,000 metric tonnes (or 28Million 12.5kg cylinders) to actual delivery of  400,000 metric tonnes (or 32Million 12.5kg cylinders) thereby directing most of its production into the domestic market. “But this was not enough for NLNG, hence this commitment to do all that we possibly can and supply 100% of our LPG production to the domestic market,” says Phillip Mshelbila, NLNG’s Chief Executive Officer.

The quantity of Butane supplied to the Nigerian market in 2021 was 378,000Tonnes. Propane volume was 21,000Tonnes. “Actual production of LPG depends on the volume and composition of feedgas we get from our gas suppliers”, says Andy Odeh, NLNG Ltd’s General Manager, External Relations and Sustainable Development. With this commitment it is expected that NLNGLtd will supply about 600,000Tonnes of both Butane and Propane into the Nigerian market in 2022. The volume of LPG consumed in Nigeria in 2021 was around 1.2Million Tonnes, according to government data.



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.

© 2021 Festac News Press Ltd..