All posts tagged GAS MONETISATION

Sasol says it will start the first, in-country production of Liquefied Petroleum Gas (cooking gas) in Mozambique by March  2024.

The product is part of the deliverables of the field development plan for the Production Sharing Agreement (PSA) in the northern region of Mozambique’s province of Inhambane.

That FDP aims to optimally develop the light oil and gas resources contained in the Inhassoro, Temane and Pande fields.

The LPG processing facility has capacity for 30,000 tons of LPG per annum. “The equipment is being installed in the factory under construction for the production of the field”, according to Radio Mozambique. Mateus Mosse, director of Cooperative Relations at Sasol. says that the pace of the work is satisfactory and believes that the deadlines established for the completion of the works will be met.

“What Sasol will produce in terms of cooking gas corresponds to around 60 to 70% of the country’s demand. It is true that the economy is growing, this could perhaps reduce demand to 50%, but it is already significant in terms of contribution to the country”, Mosse told the country’s government owned radio  “Let’s stop importing 50% of the cooking gas that the country needs, as there is a lot to gain. First, we will stop importing a significant amount of cooking gas; second, we will have a Mozambican company buying gas from Sasol and reselling it; we will have other distribution companies and cooking gas resellers purchasing in the country”, he said.

By Fasilat Oluwuyi & Abdulwaheed Sofiullahi

The Indorama Group has signed a memorandum of Understanding (MoU) with the Nigerian state hydrocarbon company NNPCLtd to bolster its gas offtake in the Nigerian market.

While the 1.7Trillion cubic feet is not an indication of a yearly offtake or the offtake for the entire period of the agreement, there is a hint from the part of the statement that says that the Indorama transaction looks toward “downstream production of about 4.8 MillionTonnes Per Annum (MMTPA) of products, including methanol, urea, and fertilizer to boost national food security”. Now 4.8MMTPA of petrochemicals will easily utilize over 200Million standard cubic feet of gas per day (200MMscf/d), but the details are still to be released.

The statement by Garba Deen Muhammad NNPCL’s Chief Corporate Communications Officer, adds that the MoU by NNPCL and Indorama “follows Nigeria’s President Bola Ahmed Tinubu’s commitment in India a few weeks ago to strengthen business relations between both countries”.

But Indorama is not an Indian owned group.

In the statement Mele Kyari, the Group CEO of NNPCL, is quoted as saying that the ”project aims to bring an annual contribution of $3Billion to the nation’s GDP and a lifetime contribution of $18Billion to government revenue”.

Kyari also reportedly said the project indicated in the MoU,  will generate “upstream lifecycle revenue of over $18Billion”.

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.

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.

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.”