All posts tagged power

Cameroon’s Gas to Power Market in Distress

Section: Power Deficit · June 30, 2020 · No comments |

By Sully Manope

The Cameroonian electricity company ENEO (Energy of Cameroon), has announced a 32.6% drop in the production of thermal power stations in the country in the first quarter of 2020.

The reduction (compared with production during the same period in 2019), was due to rationing carried out “at some power stations because of a fuel shortage caused by enormous cash constraints.“

ENEO has been unable to pay companies that supply gas to its generators (including Victoria Oil &Gas) as well as companies that generate power from natural gas (Globeleq, Aggreko).

Altaaqa, which supplied the generator ENEO used to convert gas to electricity at Logbagba, in Douala City, suspended operations at ENEO’s Logbaba site in September 2019.

Production capacities at Aggreko operated generating plants at Maroua and Bertoua decreased by almost 60% during the period under review, ENEO reports. Generation from Globeleq operated Kribi and Dibamba gas-fired plants also fell drastically.

This drop in thermal energy production, was, very slightly, offset by increased hydropower production, which had an uptick of 3%.

Overall, the Song Loulou and Edéa hydroelectric plants, both on the Sanaga River, provided 65% of Cameroon’s energy supply over the period.

Cameroon’s Power Utility Pushes its Gas Supplier into the Red

Section: Power Deficit · June 3, 2020 · No comments |

ENEO was once a key reason for Gaz du Cameroun (GDC) to dream big.

Seven years ago, the Cameroonian power utility promised an offtake of double the size of gas that the factories and other firms in Douala could readily demand from GDC, as the latter constructed pipelines and other infrastructure to incentivize consumption of gas in the country’s main commercial city.

But now ENEO (short for Energy of Cameroon), has fallen far behind in payment. The gross amount outstanding from the utility as at 31 December 2019 was $10.5Million, a significant debit in the balance sheet of a small player with production hardly exceeding six million standard cubic feet of gas per day 6MMscf/d.

The Logbagba gas field near Douala is GDC’s source of gas.

As far back as 14 September 2019, Altaaqa, the generator supplier to ENEO, suspended operations at ENEO’s Logbaba site due to non-payment of invoices by ENEO.

GDC had continued to invoice ENEO based on take-or-pay provisions agreed to in the binding term sheet.

In April 2020, GDC announced that ENEO had arranged “payment of Four Invoices amounting to a net total of $2.9Million to GDC via “promissory notes” in the quarter”. That comes to no more than $4.2Million gross, but there is still a significant value of unpaid invoice to go.

ENEO’s default in paying a hydrocarbon producer is contrary to the new normal in Africa, where monopoly utilities and state hydrocarbon companies have general turned the corner in their attitude to paying debts owed to hydrocarbon producers in their countries.

Tanzania’s state hydrocarbon company TPDC and state power monopoly TANESCO pay gas producers more promptly. Egypt’s EGAS has improved terms of gas tariffs and annulled its debts significantly. Nigeria’s NNPC, though not exactly comparable as its case is joint venture agreements, has almost extinguished cash call arrears.

What makes the ENEO example particularly odd is that it is not an entirely state-owned company. It is majorly owned (51%) by Actis, the British investor and 44% owned by the Government of Cameroon. ENEO employees own a 5% stake. It is indeed an outlier of an example.

Cameroon Calls for Expression of Interest for Limbe Gas to Power Plant

Section: Power Deficit · May 11, 2020 · No comments |

Cameroon has launched a call for expression of interest to pre-qualify partners for the study, construction, and operation (Build, Operate and Transfer mode) of a gas-fired thermal power plant in Limbé, in the country’s Southwest.

Bidders have until July 10, 2020, to submit bids for this project, which must be completed by 2024, according to the government’s timeline.

With a production capacity of 350 MW, the Limbe gas-fired power station is expected to improve the supply of electricity in the Littoral, West, and South-West regions, a statement by the Ministry of Energy noted.

The Limbé power project is expected to include the conversion to natural gas of an existing 85 MW heavy- fuel-oil-fired reciprocating power plant and the addition, at the same site, of 265 MW of new-plant capacity. The new construction will be a combined-cycle, gas-fired plant.

Over the past 12 years, several actors have been involved in one iteration or the other of this project. With this expression of interest, it does seem as if the Cameroonian government has severed relationship with these players.

Shell Plots A Return To Angola

Section: Others · August 23, 2018 · 1 comment |

By Moses Aremu, Editor

Anglo Dutch major Shell is keen on purchasing the operator stake in Angola’s Blocks 21/09 and 20/11, two very prospective acreages in the deepwater Kwanza Basin. These are the assets that Cobalt Energy, the US minnow, operated in the country until 2015, when it sought to sell its 40% stake in them to Sonangol, the state hydrocarbon company, for $1.75Billion.

That transaction fell apart in 2016, and Cobalt took Sonangol to international arbitration over its failure to extend the licence deadlines. The two companies reached a settlement-Sonangol reported in December 2017- which called for Sonangol paying $150Million by February 23, 2018 and a further $350Million by July 1, 2018.

Sonangol has now put up, for auction, Cobalt’s 40% stake and operatorship of these assets.

Observers see Shell’s interest in the blocks as a way of re-entering the country. Cobalt’s 2016 annual report indicated that it made seven discoveries in the blocks with a total of 750Million gross barrels of oil equivalent. A significant part of the volume is natural gas, the hydrocarbon fluid type that Shell is most interested in trading with.

Shell went to Sonangol’s data showroom in Houston on early June 2018, with a delegation of about a dozen officials and the company was widely speculated as the leading contender for the assets.

Shell was one of the earliest entrants into the deepwater activity in Angola between the early and late 1990s. Its Bengo-1 well, drilled in Block 16, tested 1,780BOPD in one reservoir, the first discovery in deepwater Angola. The company’s initial enthusiasm about the structure was restrained by the well’s high gas cap and pancake thin reservoirs, but Shell was willing to risk an early production. The enthusiasm waned when Bengo-2 turned out to miss even the thin bed that was of such fascinating interest in Bengo-1. Then the more it drilled, the less fortunate the company got. Whereas other operators: TOTAL, Chevron, ExxonMobil, even BP, went on to make discovery after giant discovery, Shell got trapped in a run of ill luck, drilling nine wells in Block 16, most with marginal results. This is curious, because Block 16 is located between the two most successful leases in the country: ExxonMobil’s Block 15 to the north and TOTAL’s Block 17 to the south. The last well Shell drilled in Block 16 was Chiluango-1 which was abandoned in early November 1998 as a dry well. In 1999, the company packed out of Angola and shifted its gaze to Nigeria where, by 1996, it had become sure of the deliverability of its huge Bonga structure, located in the upper slope of the deepwater Niger Delta.

US to Spend $3.9bn on ‘Smart’ Power Grid

Section: Power Deficit · November 5, 2009 · No comments |

America’s Department of Energy is investing $3.9bn in ‘smart grid’ technology, aimed at making power transmission around the country more flexible.

Steven Chu, the US Energy Secretary said the funds would help create a system to allocate electricity more efficiently. This will done through improved power lines by allowing batteries in hybrid cars to feed back into the grid when needed.

“Right now, the way we distribute energy, it’s like plumbing – it’s down the hill:’ he told reporters recently. When asked about people objecting to high-voltage power lines being built near their homes as part of a smart grid, Chu said he would appeal to US national interests.

Nampower Builds A 22MW Plant At Walvis Bay

Section: Power Deficit · November 5, 2009 · No comments |

Napower, the Namibian state power utility, has awarded Barloworld Namibia a $31 million engineering, procurement, construction and turnkey (EPCT) contract to build a new power station at Walvis Bay. The power station, to be named Anixas, will provide additional power to the fast-growing uranium-mining sector on the Namibian west coast. It will produce 21,5 MW using diesel-powered generator sets. The project is due for commissioning in December 2010.

Dark Zim Lit Up By Neighbours

Section: Power Deficit · November 5, 2009 · 1 comment |

Namibia will help Zimbabwe ramp up power production from the current 450 MW to at least 750 MW at the Hwange thermal power station. Botswana is aiding Zimbabwe in the revival of the Bulawayo station.

NamPower invested $45million in the Zimbabwe power project, which includes the addition of two more generation units later in 2009. Botswana Power Corporation (BPC) is investing $8million in the revival of the 90MW Bulawayo station, with a view to boosting the capacity to 120MW.

The Hwange station is already using four units, all revived with the help of NamPower in return for the exportation of an unspecified percentage of the power produced to Namibia. Botswana Power Corporation expects to have a 50:50 share with Zimbabwe, so both countries will get substantial benefits out of the deal.

Zimbabwe has a lot of power generation infrastructure rotting at Harare, Manyame and [the] Kariba thermal power stations. Undeveloped projects include the Gokwe north power station, which has the capacity to produce 1 400 MW, the Lupane methane gas project which has a potential for 300 MW and the Batoka Gorge hydroelectric project, which can generate up to 1 600 MW.

The country’s hydroelectric potential remains underutilised, as it has many projects, which have been on the cards for years. Projects are stalled because investors, who left the country when the farm invasions began in are still largely unwilling to return. Zimbabwe has a peak demand of 2 000 MW, produces only 1 100 MW and imports up to 500 MW from neighbours Zambia, Mozambique and the Democratic Republic of Congo. It also has a stand-by agreement for emergency power supplies with South Africa.

Afam Power Plant Is Far From Ready

Section: Power Deficit · November 15, 2008 · No comments |

Shell Nigeria has completed one of the three, Open Cycle gas turbines in the Afam Power Plant, but the facility cannot run, in part because of the vandalisation of the Alakiri gas pipeline. This is contrary to the widespread rumour that the recent, slight improvement in Nigerian power supply was due to the commissioning of the Afam power plant.

The company plans three 147MW Open Cycle gas turbines, (totaling 441MW) and one 200MW steam turbine which, when coupled with the three gas turbines, makes the Afam plant the biggest combined cycle power plant on the African continent.

But there are several obstacles on the way to delivery. The entire plant may be ready for commissioning a year from today, but the transmission grid, as it is, is not stable enough to transport the power.

Mauritania inaugurates first solar energy project

Section: Power Deficit · April 18, 2008 · No comments |

MAURITANIAN ENERGY MINISTER Oumar Ould Yali has inaugurated the construction of the country’s first solar energy station in the town of Beled Teyeb. The electrification project, funded by Spain, is expected to benefit 4,000 families in the region. Ould Yali said the project would contribute to improving people’s living conditions, creating new job opportunities and reducing poverty.