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LPG Production to Commence in Mozambique in 2024

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.


Mozambique Sees Decline in FDI as TOTAL Holds Up Massive Gas Project

Mozambique experienced a 32% reduction in the flow of Foreign Direct Investment (FDI), totalling $350.4Million in the second quarter of 2023, compared with $460.1Million in the previous quarter.

The raft of investment in the construction phase of gas development projects: by Sasol in its Production Sharing Agreement (PSA) licence onshore inhambane province; by ENI on the Coral South FLNG and TOTAL in the large 13Million Metric tonnes LNG project, have cooled. Sasol has nearly completed the integrated oil and gas projects in inhambane; ENI is now producing from Coral South FLNG and so is no longer in the spending mode and TOTAL hasn’t entirely returned to work in the troubled Cabo Delgado province.

Data contained in the most recent Bank of Mozambique (BdM)’s monthly Statistical Information (SI) report, recently indicates that the decline is largely attributed to almost 50% drop in investments in the extractive industry, especially in Major Projects (GP).

The SI report said: “In the period under review, the flow of FDI in Major Projects totalled $278.8Million dollars, compared to $414.6Million in the previous quarter.”

South Africa remains the largest contributor of FDI inflows into Mozambique (39.1%).


Indorama Inks Agreement for More Nigerian Gas Offtake

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.

Indorama Eleme Petrochemicals (IEP), the Nigerian subsidiary of the Singapore based, Indonesian founded conglomerate, already receives over 100Million standard cubic feet per day of gas from the Nigerian Agip operated assets in Rivers and Bayelsa States in eastern Nigeria, to produce fertilizer and other petrochemicals.  IEP also takes up Propane from the NNPC operated Oredo gas plant in Edo State, (in the country’s Midwest), but this MoU indicates that it will expand.

The NNPC statement on the MoU is vague on details about the volume per day of natural gas that the expansion will entail, but it notes that “the opportunities include the monetization of over 1.7 TCF of gas and 100Million barrels of oil reserves, generation of upstream Gas Supply”.

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”.

 


Baker Hughes to Supply Equipment for Venture Global’s 100 MTPA LNG Expansion

Venture Global LNG has announced its long-term expansion plan to increase production from 70Million tonnes per annum (MMTPA) to more than 100MMTPA of nameplate LNG export capacity.

To support this initiative, Venture Global will significantly utilize Baker Hughe’s equipment.

The two companies: Venture Global and Baker Hughes have executed an expanded master equipment supply agreement for the delivery of additional liquefaction train systems and power island systems for Venture Global’s future LNG export projects. The expanded agreement was announced on the margins of Gastech in Singapore in the presence of Venture Global CEO Mike Sabel and Baker Hughes Chairman and CEO Lorenzo Simonelli.

Venture Global  says that “Cargoes originating from its Calcasieu Pass project have been delivered to 24 countries and accounted for approximately 10% of the LNG exported from the United States to Europe in 2022 and 2023”.

The company has taken Final Investment Decision (FID) on both phases of its 20.0 MMTPA nameplate Plaquemines LNG facility, which is on target to produce first LNG in 2024. The project has received the first four liquefaction train modules (Blocks 1 and 2) and the roof will be raised on its third LNG storage tank. The company “expects to commence construction of its CP2 LNG facility later this year, following receipt of FERC authorization”, Venture Global explains in a statement. “To date, 9.25 MTPA of CP2 LNG’s 20.0 MMTPA nameplate capacity has been sold under 20-year sales and purchase agreements. Baker Hughes, as a strategic LNG-equipment supplier to Venture Global, provided comprehensive LNG technology solutions to the Calcasieu Pass LNG facilities, and will provide the same to the currently under-construction Plaquemines LNG facility.

“Venture Global is thrilled to announce our long-term plan to expand LNG production both in and outside of Louisiana, building on the momentum of our first three projects – Calcasieu Pass, Plaquemines LNG and CP2 LNG,” said Mike Sabel, CEO of Venture Global. “Now more than ever we are committed to our mission of delivering low-cost LNG at a larger scale to support the world’s growing demand for energy security, prosperity, and environmental progress.”

 

 


Cameroon Rejects Operator’s Plan For Gas Price Hike to >$8/Mscf

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.

 

 


Nigerian Regulator Publishes Gas Trading/Gas Exchange Regulations

The Nigerian Midstream and Downstream Petroleum Regulatory Authority has published regulations on gas trading and gas exchange.

The regulations, already gazette, are to—

(a) regulate the establishment and operations of gas trading and settlement exchange platforms;

(b) establish the principles for the secure, reliable and efficient trading and settlement of natural gas and other gas commodities; and

(c) promote and sustain the efficient and robust gas trading, exchange and settlement of natural gas and other gas commodities.

These Regulations shall apply to activities connected to the establishment of secure, reliable and efficient trading and settlement systems for natural gas and other gas commodities on exchange platforms regulated by the Authority.

Those qualified to participate in a gas trading and settlement exchange are —

  • exchange operators; (b) natural gas transmission line operators; (c) gas producers ; (d) gas aggregators ; (e) gas shippers ; (f ) wholesale gas suppliers, gas distributors, gas retailers and wholesale gas consumers ; (g) gas facilities and terminals or gas importers ; (h) network operators ; (i) clearing houses ; (j) participants of the exchange ; (k) members of clearing house ; (l) gas transporters ; (m) gas storage providers ; (n) gas exporters ; (o) any other party transacting on the exchange ; and (p) potential exchange participants.

The Authority may initiate action for market coupling of a gas exchange with another exchange, where a commodity, which is produced by utilising gas as a major input, is traded, to minimise the risk to a producer of such commodity. The Authority may extend applicability of these Regulations, with or without modifications, to derivatives, forward and future contracts in respect of such commodities and services. The NMDPRA may also allow contracts at the gas exchange denominated in foreign or local currencies. The Authority shall approve new contracts introduced by the gas exchange in these Regulations.

For approval of new contracts, the Authority may examine intra-day, day-ahead, term-ahead contract and other like contracts; price discovery methodology and proposed matching rules; (c) transaction period ; (d) risk management mechanism ; (e) margin mechanism ; (f ) final price settlement mechanism ; (g) gas delivery mechanism ; (h) delivery duration ; and (i) penalty for contractual deviation.

The Authority, after granting the gas exchange an opportunity of being heard, may by order, suspend or withdraw transactions on any contract from the gas exchange and issue any consequential directive as deemed necessary..

A gas exchange shall adopt market design and propose contract specifications, keeping in view the following principles — (a) price discovery mechanism shall ensure fair, neutral, competitive and efficient prices ; (b) the bidding mechanism may be auction or as continuous ; (c) contract design shall be such so as to increase liquidity ; and (d) the physical market design and pipeline operations shall comply with the guidelines and regulations provided by the Authority.

Fuller details of the Nigerian Gas Exchange Regulations are on the…


Ghana to Pay $2.9/MMBTU for Jubilee Field Gas

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.


Saipem Wins $1Billion Contract for a Libyan Gas Project

Italian engineering firm Saipem a has been awarded a new contract by Mellitah Oil & Gas B.V. Libyan Branch, a consortium formed by National Oil Corporation of Libya and ENI North Africa, for the development of the Bouri Gas Utilisation Project (BGUP), worth approximately $1Billion.

Saipem will undertake revamping of the platforms and of the facilities of the Bouri gas field, which lies in water depths between 145 m and 183 metres, offshore the Libyan coast. The contract entails the engineering, procurement, construction, installation and commissioning (EPCIC) of an approximately 5,000-ton Gas Recovery Module (GRM), onto the existing DP4 offshore facility, together with the laying of 28 kilometres of pipelines connecting the DP3, DP4 and Sabratha platforms.

The main lifting operations will be executed by the semi-submersible crane vessel Saipem 7000. With this award, Saipem confirms its commitment and competitive positioning offshore Libya. The completion of the project will make an important contribution to reducing CO2 emissions in Libya.

Saipem reports the transaction as a “related party transaction”, pursuant to Article 6 of the Consob Regulation on related party transactions, since ENI S.p.A. jointly controls both Saipem and Mellitah Oil & Gas B.V.

Saipem is involved worldwide in the engineering and construction of major projects for the energy and infrastructure sectors, both offshore and onshore.


Fuel Subsidy: Nigeria Chooses CNG as Alternative Fuel for Mass Transit

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.”

 

 

 


Morocco Increases its Gas Import from Spain as Algerian Supply Disappears

Mohammed Jetutu, in Cairo

Morocco imported about 90Million cubic feet of gas per day (90MMscf/d) from Spain in May 2023, a fourth consecutive monthly record from its European neighbour.

The volumes were less than the 105MMscf/d that the North African kingdom used to receive from Algeria, for the purpose of firing its Combined Cycle Gas Turbines (CCGT).

Hydrocarbon starved Morocco has struggled with its gas to wire projects since Algeria stopped exporting piped gas to the kingdom through the Gazoduc Maghreb Europe (GME) pipeline in October 2021.

Algeria continues to pipe gas to Spain through the Medgaz line, a second route.

But the molecules from Spain to Morocco are redirected LNG imports, which are piped to Morocco via the reversal of the same GME pipeline that used to ferry the Algeria-Morocco-Spain volumes.

© 2021 Festac News Press Ltd..