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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.

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NPDC Supplied Half a Trillion Cubic Feet, Earned ₦210Billion, from Natural Gas Supply, in 2020

By Toyin Akinosho

Nigeria Petroleum Development Company (NPDC) supplied 529.7Billion standard cubic feet of gas to 13 companies in 2020, earning ₦210Billion for its effort, according to the audited 2020 annual report of the Nigeria National Petroleum Corporation (NNPC), released in September 2021.

NPDC, the NNPC’s E&P operating subsidiary, supplied close to half of the volumes to NLNG, the report says.

NLNG, intriguingly received 256Bcf of gas throughout the year, or around 700Million standard cubic feet a day.

The least offtaker of gas from NPDC in 2020 was Dangote Fertilizer, which is also NPDC’s newest customer, as it started operations in 2020.

The NLNG data is intriguing because the only acreages in NPDC portfolio…Click here to read full article

Cameroon Will Import 120,000MT of LPG in 2021

Cameroon’s Bipaga Liquefied Petroleum Gas (LPG) plant, owned and operated the country’s National Hydrocarbons Corporation (SNH), supplied 25,092 metric tons (MT) of LPG to the local market in 2020, representing 16.93% of the national supply, according to SNH data. 

In 2021, this supply could rise to 34,000 MT, due particularly to the optimization of the natural gas (from Sanaga Sud) treatment process, the SNH adds. 

But the country consumes around 150,000MT per year.

Since Cameroon became a natural gas producer in 2018, then it has been processing part of its production to supply households. 

The Bipaga LPG depot, indeed, was commissioned in the same year. However, its production is currently unable to meet local demand. So, the country resorts to imports to fill the gas demand. For instance, to cover the needs this year, the country plans to import 120,000 metric tons of domestic gas.

Mozambique’s Floating LNG will Reach First Gas in 2022

By Toyin Akinosho

There is a clear line of sight for ENI operated Coral South Floating Liquefied Natural Gas (FLNG) to commence commercial production in 2022.

It is official.

Ernesto Max Elias Tonela, Mozambique’s energy minister, says the 3.4Million Tonnes Per Annum (3.4MMTPA) capacity production facility offshore Mozambique is on track to start as planned in 2022.

Coral South — which moved to final investment decision in 2017 — is based on the 16 Trillion cubic feet of resources in the Coral field in Area 4, offshore Mozambique.

But it is an entirely different project from the ExxonMobil led Rovuma LNG project, an onshore based 15MMTPA LNG facility which will monetise resources from the Mamba field in the same Area 4.

“This is the very first step, but a significant step, for Mozambique to join the LNG producing countries,” Tonela says.

In addition to the Coral South FLNG and Rovuma LNG (R-LNG) is the Mozambique LNG (M-LNG) project, a TOTALEnergies operated development which is 13MMTPA in scope.

Collectively, these three LNG projects add up to more than 30MMTPA of LNG production capacity under development, but they are evolving at varying speeds.

Whereas the Coral South FLNG is close to first gas, M-LNG took final investment decision in 2019, but construction has been obstructed by Islamic insurgency in the vicinity of the gas project. The Rovuma LNG facility, meanwhile, remains on hold with no final investment decision yet.

In late March, dozens of people were killed during attacks on the town of Palma, prompting TotalEnergies in April to declare force majeure on work at the M-LNG plant.

Tonela said the Coral South floating LNG vessel was due to arrive in the last two months of 2021 from a shipyard in South Korea. In 2016, ENI and its Area 4 partners signed an agreement with BP to take the entire volume of LNG to be produced by the project for over 20 years.


Mozambique Gets Very Little of Rovuma Gas for Domestic Market

The sale of nearly 90% of the production of the Mozambique LNG project has been secured by long-term contracts for delivery to customers in Asia and Europe, according to TOTALEnergies, operator of the 13Million Metric Tonne Project.

“Part of the remaining gas is expected to be kept for the domestic market in order to contribute to the country’s economic development. The first LNG shipments are expected in 2024”, TOTALEnergies explains in a briefing.

But even if TOTALEnergies was ready to set aside more gas for the country’s domestic market, the government wasn’t exactly bullish about pushing homegrown natural gas utilization.

As the country became surer about the likelihood of Final Investment Decision (FID) for the two massive LNG projects, (28Million Tons Per Year in total), the government selected several initiatives that would benefit from the domestic gas that the LNG partners were obliged to make available to the state. But all of the project promoters have been forced on the backfoot.

The Norwegian fertilizer company Yara International, which had been given the nod to build a petrochemicals plant supplied with gas from TOTAL operated Area 1 (after development), has since left, after raising several concerns about the slow pace of regulatory discussions between it and the authorities. Even if the gas was not going to be available until the first cargo of LNG is exported, there needed to be a framework. But the government’s wholesale focus on the export has sucked out all the energy in the room.

Anglo Dutch Shell’s plan to construct a Gas to Liquid Plant with the same Cabo Delgado gas was also stalled. So, Shell has left, as has GL Africa Energy, which won the bid for a 250-MW gas-fired power station. The three projects were meant to process at least 411 Million standard cubic feet of gas a day (411MMscf/d) after the commencement of the LNG production, with job opportunities.

TOTALEnergies May Return to Mozambique Gas Site by Mid 2022

TOTALEnergies is mulling the possibility of returning to construction site on the massive gas project in Mozambique by the first half of 2022.

“We are in constant discussion with them (TOTALEnergies)”, says Francesco Caio, CEO of Saipem, a key contractor on the project: a 13Million Metric Tonne Per Annum Liquefaction Plant in the north of the country. “The hypothesis, obviously depending on the evolution of the situation in the country, is that work can be resumed in the first half of next year”. 

Caio says that the project in Mozambique, which is the largest in which Saipem is currently involved, “remains in the order book as of June 30, 2021 for an amount of approximately 3.6Billion euros with a reshaping of construction times”.

TOTALEnergies declared the force majeure on the LNG Mozambique project on April 26, 2021, citing security reasons. The operator and its contractors evacuated the site.

Since then, however, the Mozambican government has boosted security by engaging the Rwandan army as well as the entire Southern Africa Development Commission, initiatives which have led to the deployment of military troops from South Africa, Botswana, Angola, and Malawi. President Fillipe Nyusi is keen on getting TOTALEnergies back to the project site on the Afungi Peninsula, for Africa’s largest ongoing gas processing plant. And despite the challenges, the French major itself has not taken the project off its radar.

“TOTALEnergies has always anticipated to us that this suspension would have lasted a minimum of 12 months”, says Maurizio Coratella, Saipem’s Chief Operating Officer of the Onshore Engineering and Construction Division. “The suspension started in the mid of April 2021. Therefore, all our numbers are reflecting a resumption of activities in the first quarter of 2022”.

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