All posts tagged downstream

NMDPRA Grants Approvals for CNG Supply, LPG Infrastructure, to Femadec, Novertek Respectively

Section: Downstream Gas · September 19, 2023 · No comments |

By Fasilat Oluwuyi, Reporter, Energy Access, Africa Oil+Gas Report

The Nigerian Midstream and Downstream Petroleum Regulatory Authority(NMDPRA) has signed agreements with Femadec and Novertek Energy on Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG).

This was disclosed via NMDPRA’s X account (formerly Twitter) on September 19, 2023.

The Regulatory Authority said it has granted approved to Novertek Energy Limited to construct (ATC) 500MT LPG Depot in the Federal Capital Territory.

“The Midstream & Downstream Gas Infrastructure Fund (MDGIF) of the Authority signed an MoU with Femadec Energy focusing on the provision of Compressed Natural Gas (CNG).

“The Presidential Initiative on Compressed Natural Gas (PICNG) which is the driver for the Federal Government’s “Decade of Gas” initiative was also present at the event., ” NMDPRA said in the statement.

South Africa’s Transnet Keeps Pipeline Theft Down, Raises Profits

Section: DOWNSTREAM/RETAIL · September 9, 2023 · No comments |

By Toyin Akinosho, Publisher

Transnet, the South African state-owned logistics company says the annual revenue of its Pipelines unit was 7% above budget and operating expenditure was maintained well below the budget, resulting in EBITDA being 27% above budget in the 2023 financial year.

Transnet’s Pipeline Unit, simply called ‘Pipelines’, operates and maintains a 3,114 kilometre high-pressure petroleum and gas pipeline network in South Africa. The flagship infrastructure of that network includes the 715 kilometre long, multiproduct pipeline (MPP) to transport petrol, diesel and jet fuel from Durban to Gauteng as well as the 600 kilometre, 16-inch Secunda–Durban natural gas pipeline.

“Pipelines made significant progress in reducing fuel theft incidents in 2023. Pipelines achieved an 8.6% reduction in product loss due to theft incidents in 2023, when compared to the prior year, despite the number of fuel theft incidents increasing in 2023”, the company explains.

Transnet then claims that “the implementation of long-term holistic, sustainable solutions as well as ongoing engagements with all stakeholders to curb the number of incidents yielded positive results as fuel theft incidents reduced by 63% in the second half of the year when compared to the first six months”.

The targeted volume and actual deliveries for the 2023 financial year include:

–Targeted Total Petroleum volume: 15 432Million litres; Achieved volume: 15,500Million litres.

– Targeted Natural gas volume: 533Million cubic metres (or ~18.8Billion cubic feet) ; Achieved volume: 516Million cubic metres (or ~18.2Billion cubic feet).

Transnet Pipelines considers product theft along its pipelines as one of the company’s top risks, as, the company says:

It has adverse impact on Pipelines’ reputation and brand due to negative media coverage associated with the theft of product incidents
Loss of volumes as a result of product theft negatively impacts volume and revenue objectives

The product theft incidents caused interruptions on the pipeline operations, however, Pipelines continued to ensure security of fuel supply to the inland market.

The company also considers, as a high risk, the failure of certain parts of the Durban-Johannesburg Pipeline (Sasolburg to Kroonstad and Alrode to OR Tambo International Airport) due to inherent defects in the line.

Transnet expects to continue to implement the Pipeline Security Strategy to ensure safe operations and minimise the impact of fuel theft on the operational and financial performances.

It also wants to “fast-track the environmental remediation backlog to comply with relevant and applicable environmental legislation while maintaining organisational sustainability”.

AFC Bets Big in Ugandan Petroleum Product Transportation

Section: DOWNSTREAM/RETAIL · August 24, 2023 · No comments |

The Mahathi Infra investment will eliminate approximately 100,000 truck journeys, annually, on East Africa’s busiest transport route – from Kisumu, Kenya, to Kampala, Uganda.

Africa Finance Corporation (AFC), has invested close to a hundred million dollars in Mahathi Infra Uganda Limited, one of East Africa’s largest oil and gas downstream players.

The financier’s $95.25Million investment will finance the construction of two self-propelled barges for operation on Lake Victoria, providing a more efficient and less carbon intensive alternative to traditional trucking, AFC says in a release. “The financing will also support enabling infrastructure including 14 petroleum storage tanks, 20 truck loading bays, a jetty, and a parking lot with a capacity of 50 trucks, thereby transforming petroleum product transportation in Uganda and significantly reducing cost, transport time, and carbon emissions.

Uganda is a net importer of petroleum products, primarily through the Mombasa Port in Kenya.

“As such, the project will have a significant impact on the country’s economy with a single barge trip on Lake Victoria replacing 200 trucks on the road. Annually, AFC’s investment will eliminate approximately 100,000 truck journeys on East Africa’s busiest transport route – from Kisumu, Kenya, to Kampala, Uganda.

“This reduction in road traffic will ease congestion and minimize issues such as product adulteration, theft, and accidents. It will also alleviate working capital burdens for small and medium-sized distributors, enabling them to procure products directly from the Mahathi storage facility, reducing delivery time from seven days to immediate access” the release explains.

“The self-propelled barges are designed in accordance with international Environmental & Safety standards to prevent fuel leakage. They will decrease greenhouse gas emissions by over 95%, from 172,103 tonnes to 7,692 tonnes of CO₂, annually on the basis that one self-propelled barge has the equivalent storage capacity of 200 trucks and a significantly shorter travel distance over Lake Victoria of about 250kilometres compared with the 350kilometre road route.

“Upon completion, Mahathi’s workforce is estimated to increase from 22 to 100 employees, 30% of whom will be women. The project’s impact extends beyond Uganda, serving as a foundation for future expansions into other landlocked countries near Lake Victoria”.

Libya’s Soaring Gasoline Import Bill Eats into Crude Output Revenues

Section: Downstream · July 25, 2023 · No comments |

Libya has been the second largest crude oil producer in Africa for most of the last six months.

But earnings from its near capacity 1.2Million Barrels Per Day (1.2MMBOPD) crude output are decimated by rising oil products imports, and a slump in gas exports to Italy have eaten into Tripoli’s revenues.

Libya’s crude oil output averaged 1.19MMBOPD for Q1 2023, the second straight quarter of near-1.2MMBOPD, and higher than any annual figure since 2010’s 1.54MMBOPD.

Most of the crude is exported, while the remainder is refined locally, mostly at the 120,000BOPD-capacity Zawiya refinery west of Tripoli, supplemented by small topping plants at Tobruk, Brega and Sarir.

The country’s largest refinery, the 220,000BOPD capacity Ras Lanuf plant, has been offline since 2013 due to a still-unresolved dispute between NOC and the plant’s Emirati owners.

Libya’s refined products output was 1.54Million tons (130,000BOPD) for Q1 2023, according to data from the country’s NOC.

Prudent Energy, 55 Others Get Licenses to Import Gasoline into Nigeria

Section: DOWNSTREAM/RETAIL · July 19, 2023 · 2 comments |

By Fasilat Oluwuyi, Energy Access Reporter, AOGR

Farouk Ahmed, Chief Executive Officer, Nigeria Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), has disclosed that a total of 56 marketing companies have now gotten the license to import fuel in Nigeria.

Ahmed listed Prudent Energy, AYM Shafa and Emadeb as the three companies currently importing PMS, adding that others will commence importation between August and September 2023.

The NMDPRA head, who was fielding questions by reporters, reiterated that government no longer determines the price of Gasoline (PMS) in Nigeria, but the market.

The subsidy on PMS in the country formally ended on May 29, 2023, the inauguration date of president Bola Tinubu. The deregulation of the market took off on that date.

Ahmed explained that 10 of the 56 companies licenced to import PMS have indicated to supply within the third quarter which is July, August and September. “And out of those, we already received some cargoes from some of these Marketers”.

“Ahmed pointed out that the fact that cargoes of PMS imported by Prudent Energy, AYM Shafa and Emadeb, arrived on July 19, 2023, was an “encouraging sign that the market is liberated and everyone is free to import so long as you are working within the framework especially in terms of quality.”

Mele Kyari, NNPCL’s Group Chief Executive Officer,who was at the interactive session with reporters, said the upward rise in prices of PMS in the last six weeks of the deregulation has nothing to do with supply of PMS.

”There is no supply issue”, Kyari explained. “When you go to the market you buy the product, you come to the market and sell it at prevailing market price. There is nothing to do with supply, we don’t have supply issues.

”What I know is that the market forces will regulate the market, prices will go down sometimes and sometimes, it will go up but there will be stability of supply” he said

NUPRC Confirms Approval of ExxonMobil’s Butane Lifting Operations

Section: Downstream Gas · June 15, 2023 · No comments |

By Abdulwaheed Sofiullahi, AOGR Reporter, Regulatory Agencies & SOEs

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has affirmed the legitimacy of the lifting of Butane at the Bonny River Offshore Terminal (BRT) by ExxonMobil.

The agency dismisses media reports that insinuate that the lifting operations were illegal.

“ExxonMobil had formally applied for approval of its operations as an integrated operation, as outlined in Sections 8(d) and 318 of the Petroleum Industry Act, 2021”, according to a press release from the NUPRC signed by Gbenga Komolafe, The NUPRC Chief Executive.

“After a thorough evaluation, NUPRC granted approval for the requested operations. Subsequently, ExxonMobil obtained the necessary clearance from NUPRC for the lifting of 12,600 metric tonnes of Butane aboard the vessel named Barumk Gas on May 26, 2023.

“The Barumk Gas arrived at the BRT’s loading jetty on June 7, 2023, and loading operations took place on June 8, 2023. An official from NUPRC present at the terminal issued a Certificate of Quantity and Quality (CoQ) as required by law for accurate hydrocarbon accounting and reporting. The CoQ ensures compliance with global best practices and guarantees the vessel’s ability to sail to its delivery destination.

“NUPRC unequivocally asserts that the entire operation was conducted within the confines of the law and in alignment with its role as the technical and commercial regulator of the upstream petroleum sector in Nigeria”

The Commission denies any knowledge of illegality in the transaction and emphasizes that neither ExxonMobil Nigeria and its affiliates nor NUPRC itself committed any unlawful acts.

The NUPRC’s press release also references the 9th Senate’s ad hoc committee, which investigated oil lifting, theft, and their impact on petroleum production and revenues. As a result of the committee’s findings, the Senate passed resolutions calling for the streamlining of operations at crude oil export terminals in Nigeria. In accordance with Section 7(ee) of the Petroleum Industry Act, 2021, the Senate resolved that NUPRC should assume full regulatory oversight of all existing crude oil export terminals.

“The resolution was subsequently reviewed and endorsed by the then Attorney General and Minister of Justice, with the former President of Nigeria, Muhammadu Buhari, approving and directing immediate compliance with the resolution. This directive affirms NUPRC as the sole regulatory entity responsible for regulating and monitoring activities at all existing crude oil export terminals in Nigeria, in accordance with the relevant provisions of the Petroleum Industry Act, 2021”, the NUPRC explains.

Abdulwaheed can be reached at abdulwaheed@africoilgasreport.com

Angola, Nigeria Wind Down Fuel Subsidies, as Kenyans Brace for VAT Increases on Petrol

Section: DOWNSTREAM/RETAIL · June 4, 2023 · No comments |

By Macson Obojemuinmoin

Angola’s increase in the price of gasoline at its filling stations by 88% is the farthest it has gone, in five years, to move the needle on fuel subsidy reduction.

On June 2, 2023, a litre of gasoline shot up from 160Kwanza to 300Kwanza, an 88% jump.

The government says that measures to mitigate the effect of the price increase will be implemented for some priority sectors and “highly vulnerable classes”. The subsidy (meaning former low prices) will remain for the agricultural and fishing sectors, some public companies like the Public Electricity Production Company ( PRODEL) as well as Taxi Drivers, Bus Drivers and goods laden Trucks.

The country has determined that subsidies on petroleum products, valued at close to $3.6Billion in 2022, will go, but it doesn’t want to take off the subsidy in one fell swoop.

The story is different in Nigeria, where gasoline subsidy ended on May 29, 2023, the day of the coronation of Bola Ahmed Tinubu as the country’s 16th President. Subsidies for other products had long gone. The new gasoline prices, of between 488Naira in Lagos and 570 Naira in Borno, in the country’s far northeast, are about 186% higher than the subsidized prices which became extinct on Mr. Tinubu’s inauguration day.

Kenya’s gasoline and diesel prices are deregulated, but President William Ruto is determined that a large increase in taxes is the way to fund the building of critical infrastructure. The Finance Bill submitted in mid May 2023 to Parliament is expected to double VAT on petroleum products to 16%, pushing up prices of a litre of gasoline by Sh13.51 to Sh196.21, while diesel will increase by Sh12.40 to Sh180.88, at current crude oil prices.

Fuller details are published in the May 2023 edition of the Africa Oil+Gas Report

Post -Subsidy Alternative Fuels in Nigeria, a CNG / LPG Autogas Cost and Efficiency Comparison with Petrol

Section: Downstream Gas · May 9, 2023 · 5 comments |

Dharmattan Gas and Power Ltd., has researched the comparison between Propane LPG and Compressed Natural Gas (CNG) for the purpose of potential use in Nigeria. The company’s findings are captured below:

Propane auto gas (LPG) and compressed natural gas (CNG) are two alternative fuels that can power vehicles with lower emissions and lower fuel costs than gasoline or diesel. However, there are some differences between them that may affect the total cost of ownership and operation as described below.

Initial cost of the vehicle and the fueling infrastructure.

Propane auto gas vehicles are typically cheaper to purchase and convert than CNG vehicles, and they can use existing gasoline tanks and fuel lines with minor modifications. CNG vehicles require more expensive tanks and fuel lines that can withstand high pressure, and they may need additional engine modifications. Propane auto gas fueling stations are also more widely available and cheaper to install than CNG stations, which require compressors and storage tanks.

Fuel efficiency and performance of the vehicle.

Propane auto gas has a higher energy density than CNG, which means it can deliver more power and range per unit of fuel. Propane auto gas vehicles also have similar performance to gasoline vehicles, while CNG vehicles may experience a slight loss of power and acceleration. However, CNG has a lower carbon content than propane auto gas, which means it produces less greenhouse gas emissions per mile.

Maintenance and safety of the vehicle and the fueling system.

Propane autogas and CNG are both cleaner burning fuels than gasoline or diesel, which means they can reduce engine wear and tear and extend the life of the vehicle.

CONVERSION KITS

The primary technical aspect of the proposed conversion is to note that there are two types of conversion kits namely: the VENTURI kit and the SEQUENTIAL kit.

Differences between the Venturi kit and Sequential kit for CNG and Propane Conversion

CONVERSION EQUIPMENT LIST

Tank
Filler
Injectors
Valves
Hoses and Pipes
Mixer
Converter

Manuel Fuel Selector Switch or ECU

PROCESS FLOW DIAGRAM CNG CONVERSION

PROCESS FLOW DIAGRAM PROPANE (AUTOGAS)

VEHICLE CONVERSION COSTS

FILLING EQUIPMENT AND INSTALLATION COSTS

ENERGY PRICE ANALYSIS

Gasoline Gallon Equivalent (GGE)

It is a unit of measurement used to compare the energy content of alternative fuels to that of a gallon of gasoline. It represents the amount of energy contained in a fuel that is equivalent to the energy contained in one gallon of gasoline.

1GGE = 1Galllon = 125,000 BTU

CONCLUSIONS

Developing a single CNG filling station costs approximately 6 times the cost of a single Propane Autogas (LPG) station Converting a vehicle from petrol/diesel to CNG costs 1.3 times the cost of converting to Propane Autogas(LPG) LPG filling infrastructure currently exists in many petrol stations for the sale of cooking gas, unlike CNG filling infrastructure that currently exist in only a handful of locations nationwide.

Co-locating LPG filling infrastructure with existing petrol stations is already widely practiced making its adoption for vehicle fueling relatively seamless.

CNG price per energy unit is slightly higher than current petrol price, Propane price is higher, while petrol price is expected to be higher after removal of subsidy, assuming a price similar to diesel of N700/litre

Egypt Reduces Diesel Subsidy Further by 14%

Section: Downstream · May 7, 2023 · No comments |

The Egyptian government has raised the price of diesel by (Egyptian Pound) EGP 1.00 to EGP 8.25 per litre.

The government left gasoline(petrol) prices, which are also subsidized, unchanged, considering that it was only increased in March 2023.

The 14% raise on diesel shoots up the price of product by 22% since July 2022, when the government increased the price for the first time in five years in the context of the commodities shock triggered by the war in Ukraine.

Egypt’s Petroleum Ministry argues that the price of diesel to the government has risen to EGP 12.25 per litre as a result of both devaluation of the local currency and the higher prices in the global market. This increase should peg the subsidy at $2.1Billion (or EGP 64Billion) a year, from $2.64Billion (or EGP80Billion), the Ministry says.

Egyptians use diesel as the key fuel of public transport, as well as for vehicles that transport goods and raw materials around the country.

North Africa’s largest economy and the Arab World’s most populous country is an energy subsidy state. It pegs prices of piped natural gas for households and industry and converts over 4Billion standard cubic feet of gas every day into more than 40,000MW of electricity.

Russia Will Help Mozambique to Stabilize Fuel Prices

Section: DOWNSTREAM/RETAIL · August 2, 2022 · No comments |

Russia has said it was open to working with Mozambique to reduce, by half, the cost of petroleum products in the country’s filling stations.

Alexander Surikov. Russian Ambassador to Mozambique, said his country would “allow Mozambique to start importing fuel directly from Russia, avoiding intermediaries, potentially reducing by at least half the costs of acquiring the products”.

Russia is wooing friends all over the world as the European Union imposes sanctions on it in the wake of its invasion of Ukraine, which has pushed up crude oil prices and exacerbated global supply change challenges. Africa has become a key site in the contest of will between Russia and the west.

″Russia is open to working with Mozambique in this regard”, Surikov declared at a consultation meeting with the Confederation of Economic Associations of Mozambique (CTA), “We are open to projects in the fuel sector and in others of mutual interest.” he said.

Mozambique has had to deal with skyrocketing prices of petroleum products. The Mozambican Energy Regulatory Authority (Arene) announced the third fuel price rise in 2022 on July 1.

The sharpest rise was for LPG cooking gas for which a kilo of gas leaped by 19.28% from 85.53 meticais to 102.02 meticais; the price of a litre of diesel rose by 11.4% from 78.97 to 87.97 meticais. For gasoline the increase was 4.4%, from 83.3 to 86.97 meticais a litre. This is the first time that diesel has become more expensive than petrol at Mozambican filling stations.

The price of a litre of kerosene rose from 71.48 to 75.58 meticais, which is an increase of 5.74%.