East Africa has received attention as the next key area for LNG development, given the size of its energy resources and its relatively small domestic demand. A number of major offshore discoveries by Anadarko Petroleum Corp. have substantially boosted estimated recoverable gas reserves in Mozambique (image), Tanzania and Uganda, potentially providing much-needed power supplies and energy for export.
Several floating LNG (FLNG) projects are under development on Africa's east coast. Italy's Eni is exploring the construction of up to three FLNG vessels in the Rovuma basin, offshore Mozambique, as an alternative to onshore liquefaction facilities and/or as an interim measure while an onshore mega-terminal is constructed.
Following countrywide elections in late 2015, Tanzania Petroleum Development Corp. announced the location of the planned LNG project at Machenga Bay. Upon closure of the Shell/BG Group transition in 1Q 2016, Shell is anticipated to assume operatorship of the project.
FLNG projects are also being developed on Africa's west coast, providing additional power generation to countries like Equatorial Guinea, Cameroon, Ghana, Senegal and Ivory Coast, among others. Ophir Energy had planned to construct an onshore terminal in Equatorial Guinea earlier in the decade; however, the company switched its focus to a $3.5-B, 2.5-MMtpy FLNG facility after finding additional reserves in its offshore blocks. Recently, Ophir signed an agreement with Schlumberger for development of the Fortuna FLNG vessel. Schlumberger will take a 40% stake and first shipments are scheduled for 2018, at the earliest. With the Fortuna FLNG project, Ophir will begin West African LNG exports two to three years before its East African LNG exports in Tanzania begin.
Golar LNG will provide Cameroon with its first FLNG vessel by 3Q 2017. The 1.2-MMtpy Golar Hilli FLNG vessel will operate off the coast of Cameroon in the Kribi fields. Ghana is working with Excelerate Energy for the development of an FLNG storage and regasification vessel that would send natural gas to the Ghana 1000 Gas-to-Power project, and be instrumental in delivering over 1,000 MW to Ghana’s national grid.
To diversify natural gas imports from sole provider Algeria, Morocco is building a new $4.6-B LNG import terminal at Jorf Lasfar. The addition of new natural gas supplies will help fuel gas-fired power plants being built near Tangier. Senegal’s power utility Senelac signed a preliminary agreement with Qatar’s Nebras Power and Japanese firm Mitsui to build an FLNG regasification terminal, helping the country utilize natural gas for power generation instead of fuel oil feedstock. The project includes the construction of a 400-MW power station. Endeavor Energy has partnered with the Ivory Coast company Starenergie2073 on the Songon power project. The $900-MM project will be located outside the capital city of Abidjan and includes the development of a 375-MW power-generation plant, LNG import infrastructure and FSRU.
The need to build up gas distribution infrastructure throughout the entirety of Africa, and to integrate economic and industrial development on the local and regional levels, is of key importance. Political stability and the development of straightforward, beneficial fiscal schemes are also necessary to the establishment of successful and lucrative energy infrastructures in African nations. These fiscal schemes include the need for long-term contracts to support large LNG investments and pressure to move away from oil-indexed pricing for LNG supplies, a discussion that is also ongoing in Asia-Pacific.
This article came as courtesy of Gas Processing. As Adrienne discussed, Africa is expected to become a key area for LNG developments. Do you think infrastructure investments are set to increase this year? Share your views below.
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Image: Anadarko drilling operations offshore Mozambique. Photo courtesy of Anadarko.
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