• Now that the North Doesn’t Need African Energy, Oil and Gas Must Stay in the Ground

    Following a series of attacks during the Invest in African Energy forum in Paris this May, environmental group Friends of the Earth has attempted to justify their actions at the event – a forum which sought to increase investment in African energy and bolster Africa’s economic development. The group stated that it is an “illusion” that developing oil and gas will lead to development in Africa, despite stating that the Global North has used African resources to develop for decades.

    Friends of the Earth: Now that the North Doesn’t Need African Energy, Oil and Gas Must Stay in the Ground

    Friends of the Earth Africa explained to Rigzone that, “Fossil fuels have been extracted from different parts of the African continent for more than 60 years, mostly for export to serve the countries of the global North.”

    This is true. They continue to explain that this has resulted in environmental degradation, gas flaring, negative health impacts, human rights abuses and more, all while 600 million people lack access to electricity and 700 million have no access to clean cooking solutions. This is also true, and yet, rather ironically, the group continues to demonize the development of oil and gas in Africa at a time when the continent is planning to utilize these resources to address its own energy access and clean cooking challenges.

    As sovereign nations, African countries have the right and the responsibility to use their natural resources to improve the lives of their people. At the African Energy Chamber (AEC) – the voice of Africa’s energy industry – we are confident that we can, indeed, achieve this goal – despite blatant and spiteful attacks by foreign environmental groups. It is disheartening to see groups like Friends of the Earth pursuing actions that could jeopardize Africa’s oil and gas development all in the name of preventing climate change. Never mind the importance of natural gas to Africans; of its potential to grow and diversify economies; of the role it will play in alleviating energy poverty and bolstering clean cooking access; of the considerable time and resources that African governments have invested in making LNG projects possible.

    “This is not the first time that non-Africans have attempted to interfere with Africa’s oil and gas industry. International organizations such as the World Bank, the International Energy Agency and private investors face pressure by environmental groups to stop financing African fossil fuel production,” states NJ Ayuk, Executive Chairman of the AEC.

    Natural gas, in particular, is set to transform African countries. Mozambique, for example, has placed gas-to-power at the very heart of its development plans. The country has over 100 trillion cubic feet of offshore gas reserves, with the 450 MW Temane power plant on track for production in 2024. Energy major TotalEnergies has also announced plans to supply 1,000 MW of electricity to South Africa from the Matola LNG-to-power project in Mozambique.

    In North Africa, Algeria has used gas to not only power its economy, but also generate revenue that feeds into other industries across the country. The country is the fifth largest LNG producer globally and has used export revenues to develop its local power generation and transmission infrastructure. Power plants consume 40% of the country’s gas resources and the country enjoys an electrification rate of 99.8%.

    Nigeria is on a similar trajectory. At over 200 tcf, the country has the largest gas reserves in Africa, with the share of gas in the domestic energy mix projected to increase to 57% by 2040. The $2 billion Egbin Phase II project is expected to come online this year, increasing output by an additional 1,900 MW at the 1,320 MW facility. Construction has also started on a 1.35 GW gas-to-power project, developed by technology company GE Vernova, while the Nigeria LNG Train Expansion project – a $5 billion development – will increase the Nigeria LNG terminal production capacity by 35%.

    Angola is already taking concrete steps towards eliminating gas flaring – having endorsed the World Bank’s Zero Routine Flaring by 2030 initiative – and positioning natural gas as a key pillar of economic growth. TotalEnergies recently achieved FID on its Cameia-Golfinho gas field development, which is set to utilize a zero-flaring concept and supply gas to a combined cycle turbine to produce electricity for domestic use. Development of the Quiluma and Maboqueiro fields – the country’s first non-associated gas project – is also underway and will supply the Angola LNG facility.

    Meanwhile, the Republic of Congo is finalizing its Gas Master Plan, which will provide a framework for harnessing natural gas both for domestic consumption and export. The country exported its first LNG cargo from the Congo LNG project earlier this year, and with 10 tcf of natural gas resources, is well on its way to monetizing untapped reserves. Yet, Friends of the Earth – a group which has also benefited from African resources – believes they know what is best for the continent. They believe that their solutions, and not the ones of Africans, should be adopted. They are proving time and time again that they have no qualms in dismissing African voices.

    “Africa cannot be a continent where our budgets are left to donors. Every time we go begging to other countries for aid, the dignity of Africans suffers. What the AEC is advocating for – and will continue fighting for despite attempts by foreign groups to disrupt progress – is for all Africans to have the dignity of work, the ability to build better lives and to harness their natural resources to alleviate energy poverty. We want an Africa that not only develops but thrives, and leveraging natural gas is the only feasible path to achieving that goal,” added Ayuk.

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  • Vaclav Bartuska to Explore Collaborative Energy Ventures at Angola Oil & Gas event

    Ambassador at Large and Special Envoy for Energy Security at the Czech Ministry of Foreign Affairs Vaclav Bartuska will participate as a speaker during this year’s Angola Oil & Gas (AOG) 2024 conference and exhibition.

    Bartuska’s participation at AOG 2024 – taking place October 2-3 in Luanda under the theme Driving Exploration and Development Towards Increased Production in Angola – is expected to drive efforts towards economic diversification and multilateral development.

    Organized by Energy Capital & Power, AOG is the largest oil and gas event on Angola. Taking place with the full support of the Ministry of Mineral Resources, Oil and Gas; national oil company Sonangol; the ANPG; the African Energy Chamber; and the Petroleum Derivatives Regulatory Association, the event is a platform to sign deals and advance Angola’s oil and gas industry. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.

    With the governments of the Czech Republic and Angola having recently met to increase cooperation in the areas of aviation and transport, healthcare, smart agriculture, mining and geological exploration, the two countries are well-positioned to benefit from mutual cooperation, investment protection and promotion.

    Key topics of the meeting, which included the President of Angola João Manuel Lourenço and the Prime Minister of the Czech Republic Petr Fiala were economic cooperation, support for Czech exports and investments and defense-industrial cooperation. It was noted during the meeting that the Czech Republic is interested in participating in the Lobito rail corridor project – a 1,300km railway from the port of Lobito to Angola’s border with the Democratic Republic of Congo.

    As such, Bartuska’s participation at AOG 2024 is poised to give a new impetus to the relations between the Czech Republic and Angola while providing opportunities for the countries to advance strategic partnerships and drive a new generation of economic ties between Europe and Africa.

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  • Oil Prices Expected High Over Iranian President’s Death

    The sudden death of Iranian President Ebrahim Raisi in a helicopter crash has sent shockwaves through the global oil market, with experts predicting a potential spike in oil prices.

    Raisi’s demise has raised concerns about the impact on Iran’s oil production and exports, which could lead to volatility in the market.

    Nigeria’s crude oil grades, including Brass River and Qua Iboe, have already seen gains, with prices reaching $86.60 per barrel on Monday. This increase is attributed to the uncertainty surrounding Iran’s oil policy following the president’s death.

    Nigeria’s oil futures, Brass River and Qua Iboe, recorded gains on Monday following the news that a helicopter with Iran’s president on board had crashed and both he and the country’s foreign minister died.

    On Monday, Brass River, a sweet medium light crude, gained 0.70 percent to trade at $86.60 per barrel, while the Qua Iboe, a light sweet crude grade, also gained 0.70 percent to trade at $86.60 per barrel.

    Analysts believe that the death of the Iranian president could cause disruptions to the country’s oil production, which could affect global oil supplies and prices.

    However, some experts suggest that the oil market may remain relatively stable due to existing supply capacities, particularly with the Organisation of the Petroleum Exporting Countries (OPEC) and its allies scheduled to meet on June 1.

    “From here, we expect overall market fundamentals to improve and see similar inventory draws and price action as observed last summer, with Brent oil moving $10 higher from current levels by September,” JPMorgan analysts wrote in a note late Sunday.

    Iranian President Ebrahim Raisi, a hardliner and potential successor to Supreme Leader Ayatollah Ali Khamenei, died in a helicopter crash near the Azerbaijan border, according to officials and state media.

    Despite Raisi’s death, Bloomberg reports that analysts expect Iran’s oil policy to remain unchanged as Khamenei retains ultimate authority over state affairs.

    A commodity analyst at UBS Group AG, Giovanni Staunovo, stated that “oil policies are likely to be unaffected,” a view shared by Alan Gelder, vice president of refining, chemicals & oil markets at consultancy Wood Mackenzie Ltd.

    Iran’s Supreme Leader, Ayatollah Ali Khamenei, has already made a statement seeking to reassure the population there would be no disruptions to ongoing state affairs.

    According to early reports, the crash was caused by bad weather, which made the search and rescue operation difficult.

    In other news that could cause extra volatility in oil prices, Saudi Arabia’s Crown Prince postponed a visit to Japan because of his father’s health.

    According to some analysts, taken together with the news of Iran’s president, this could result in a spike of uncertainty.

    In Europe, another Russian energy facility was hit. The Slavyansk oil refinery, located in the Krasnodar region, was damaged after a weekend drone attack, state-run TASS reported on Monday, citing a company security official.

    Russia has reported a rise in Ukrainian attacks on its territory since its forces opened a new front in northeastern Ukraine’s Kharkiv region earlier this month.

    “From here, we expect overall market fundamentals to improve and see similar inventory draws and price action as observed last summer, with Brent oil moving $10 higher from current levels by September,” JPMorgan analysts wrote in a note late Sunday.

    The Organisation of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are scheduled to meet on June 1.

    “The market also appears increasingly numb to developments on the geopolitical front, likely due to the large amount of spare capacity OPEC is sitting on,” said Warren Patterson, head of commodities strategy at ING.

    The incident has also had an impact on gold prices, which surged to new record highs, increasing by as much as 1.1 per cent to reach $2,440.59 an ounce. This rise is attributed to geopolitical uncertainty and optimism about potential interest rate cuts by the US Federal Reserve.

    The development could have significant implications for Nigeria, whose economy is heavily reliant on oil exports. A decline in demand could translate to lower oil prices and reduced government revenue, potentially leading to cuts in public services and infrastructure spending.

    As the global oil market reacts to the news, investors are closely watching for any signs of disruption to Iran’s oil production and exports. With OPEC+ scheduled to meet soon, the market is bracing for potential changes to oil production policies that could further impact prices.

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  • This African country prepares exporting its first crude ever!

     

    In Niger, political intrigues are changing the face of the country. But there’s one thing standing out. That country is about to enter the business of exporting crude oil.

    The new business dispensation is made known by the ruling military authority under the leadership of Abdourahamane Tiani.

    The government of Niger hopes to accomplish this mission through the use of the newly constructed Niger-Benin pipeline. Business is expected to commence in January 2024.

    According oil experts, this makes a significant milestone for the country in a bid to boost its economic strength.

    The business will have Chinese energy giant, PetroChina in full support. The 2,000 kilometer pipeline stretches from Agadem oilfield in Niger to the port of Cotonou.

    Empathically, Tiani announced: We can hope for first releases of barrels of Nigerien crude next January. He also stated that Niger will receive 25.4 percent of the revenue coming from sales of the crude.

    The pipeline that will carry the crude was commissioned last month by the civilian prime minister appointed the military.

    Niger, said to be one of the poorest states in the world, will sell its crude on the international oil market for the very first time.

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  • Oil up 2% to near 10-month high, OPEC predicts tight supplies

    Oil prices jumped about 2% to a near 10-month high on Tuesday on a tighter supply outlook and OPEC optimism over the resilience of energy demand in major economies.

    Brent futures rose $1.42 or 1.6%, to settle at $92.06 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.55, or 1.8%, to settle at $88.84.

    Both benchmarks remained technically overbought for an eighth straight day, and closed at their highest levels since November 2022.

    The Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecasts for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are stronger than expected. OPEC’s monthly report forecast world oil demand will rise by 2.25 million barrels per day (bpd) in 2024.

    “Crude prices are rallying after the OPEC monthly report showed the oil market is going to be a lot tighter than initially thought,” Edward Moya, senior market analyst at data and analytics firm OANDA, said in a note.

    Keeping supplies tight, Saudi Arabia and Russia last week extended voluntary supply cuts of a combined 1.3 million bpd to year end. OPEC, Russia and allied producers are known as OPEC+.

    OPEC member Libya shut four of its eastern oil export terminals due to a deadly storm, while OPEC+ member Kazakhstan reduced daily oil output for maintenance.

    The U.S. Energy Information Administration (EIA) projected global oil output would rise from 99.9 million bpd in 2022 to 101.2 million bpd in 2023 and 102.9 million bpd in 2024, while world demand will rise from 99.2 million bpd in 2022 to 101.0 million bpd in 2023 and 102.3 million bpd in 2024.
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    That compares with a record 100.5 million bpd of global oil production in 2018 and a record 100.8 million bpd of world liquids consumption in 2019, according to the EIA’s Short Term Energy Outlook.

    EIA said it expects global oil inventories to decline by almost a half million bpd in the second half of 2023, causing oil prices to rise with Brent averaging $93 per barrel in the fourth quarter.

    In the U.S., EIA projected crude output would rise from 11.9 million bpd in 2022 to 12.8 million bpd in 2023 and 13.2 million bpd in 2024, while liquids consumption would rise from 20.0 million bpd in 2022 to 20.1 million bpd in 2023 and 20.3 million bpd in 2024.

    That compares with a record 12.3 million bpd of U.S. crude production in 2019 and a record 20.8 million bpd of liquids consumption in 2005.

    Looking ahead, oil traders are waiting for supply-demand forecasts from the International Energy Agency (IEA) on Wednesday, and U.S. oil inventory data from the American Petroleum Institute (API), an industry group, on Tuesday and from EIA on Wednesday.

    Analysts polled by Reuters forecast a draw of about 1.9 million barrels of crude from U.S. stockpiles during the week ended Sept. 8.

    That would be the fifth straight weekly draw, the longest such streak since January 2022.

    U.S. consumer price index data for August on Wednesday should hint at the outlook for interest rates. The Federal Reserve is expected to leave rates unchanged at a policy meeting next week, though views are split over whether it will raise rates in November.

    The European Central Bank will announce its interest rate decision on Thursday.

    Interest rate hikes can slow economic growth and reduce oil demand.

    Additional reporting by Ahmad Ghaddar in London and Jeslyn Lerh in Singapore; Editing by Emelia Sithole-Matarise, David Goodman, David Gregorio and Timothy Gardner

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  • Meet the company that can solve Nigeria’s electricity woes

     

     

    There is a company called Ajaokuta-Kaduna-Kano Gas Pipeline Project (AKK). NNPC just claimed that this company can help to solve Nigeria’s electricity problems.

    The project is still in the works, as it is expected to be completed by the first quarter of next year. This will allow for more benefits, such as industrial development, and more job creation, and it will also deepen the local gas market.

    However, this project will more than serve Nigerians. It will serve key areas of Africa and some parts of Europe.

    To assure Nigerians that it will succeed, the advocates behind the project said it has been in the plans for some 30 years. It is expected that it will deliver at least two billion standard cubic feet of gas to the domestic market. There will also be opportunities to increase the supply.

    AKK will be expected to “debottleneck” the gas supply network in Nigeria.

    Let’s hope this will better the lives of Nigerians.

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  • 3 major states producing crude oil in Nigeria

     

    As we all know, Nigeria is the top country producing oil and gas in Africa. It is the main way in which the country earns its revenue. In this short read, we reveal the three states that are the major oil producers in Nigeria.

    Check them out below:

    1. Rivers

    Yes, Rivers State is one of the top producing states when it comes to crude oil. It is also home to two refineries. There are also other notable places in the state. This state produces 21.43 percent of the total crude emanating from Nigeria.

    2. Delta

    Delta State is the second in the line of top-producing oil and gas companies in Nigeria. The town of Uzere is one of the major places where crude oil is found in that state. The state is responsible for the production of 21.56 percent of all crude oil produced in Nigeria.

    3. Ondo

    This is another major state where crude oil is produced in the country. This state is in the southwest. It is responsible for roughly 3.74 percent of the total crude output in Nigeria.

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  • Angola´s Oil & Gas Sector Ripe for New Investments

    Angola is sub-Saharan Africa´s second-largest oil and gas producer with a current production capacity of about 1.1 million barrels of oil per day (bpd) and 17,904.5 million cubic feet of natural gas. The country’s oil and gas sector accounts for about one-third of its gross domestic product (GDP) and more than 90% of total exports. Angola has 8.2 billion barrels of proven oil reserves and an estimated 13.5 trillion cubic feet (tcf) of natural gas reserves. These impressive stats in terms of upstream potential are, however, yet to be replicated in the countries midstream and downstream sectors. The government has made it a priority, not just to harness its upstream potential, but also to focus on value creation across the entire value chain, with big investments planned in Angola’s mid-stream and downstream sectors.

    Promoting Upstream Investments

    In a bid to reverse the decline in production of recent years, the government has taken a number of aggressive steps to attract and facilitate new exploration in Angola. Firstly, the government created a separate regulator or concessionaire in 2018. Dubbed the National Oil, Gas and Biofuels Agency (ANPG), this regulator has a set of specific roles: the implementation of government upstream policy under the supervision of the Ministry of Mineral Resources, Petroleum and Gas; the revaluation of Angola’s reserves and hydrocarbon potential; the promotion of bid rounds and exploration activity; as well the regulation of the sector.

    Despite the challenges caused by the COVID-19 pandemic, the ANPG has, since 2019, organized a yearly bid to cede exploration acreage including onshore blocks, some of which have proven discoveries on them. The Agency has also announced that it will also engage in direct negotiations with interested explorers in a bid to reduce red tape and promote seismic acquisition and exploration.

    Natural gas is also expected to play a greater role in Angola’s hydrocarbon mix going forward. To that effect, the government in 2018 laid the foundation by passing Presidential Decree No. 7/18 to specifically regulate the exploration and production of natural gas. Contrary to the past, where gas was only considered a by-product in the quest for oil, the Angolan regulator now seeks to promote gas not just for export and use in the production of oil, but also as a key component to feeding industries such as power generation, petrochemicals and agriculture, with the ultimate goal of driving diversification. The new regulation allows for operators other than the national oil company Sonangol to explore and develop natural gas assets for both domestic and export markets in a speedy manner. The cost of the development of natural gas projects has also been made significantly attractive, by decoupling them from the regimes that apply to oil projects. Petroleum production tax and petroleum income tax have all been halved for gas projects and can even be reduced further for discoveries below two tcf.

    Given the importance of the sector to the entire Angolan economy, the government has also sought to gradually increase the participation of Angolans across the entire value chain, without losing its competitive edge vis-a-vis other countries. As the Angolan services sector grows in terms of technical competence, so has the opportunities for Angolan companies. In other words, local content is a priority, as the government seeks to increase local participation to ensure that the industry benefits all Angolans. However, it is driven by sensible policies aimed at keeping Angola competitive as a destination for investment.

    Mid- and Downstream Opportunities

    Like many other major oil and gas producing countries across sub-Saharan Africa, Angola’s downstream sector has not seen the same degree of capital investment compared to the upstream market.

    Despite Angola’s abundant hydrocarbon resources, there is a disproportionate 80% of refined petroleum products being imported from abroad to meet demand in strategic sectors such as transportation. Accordingly, the government plans to address downstream inadequacies through the expansion of refining capacity via a number of key projects, offering opportunities for investment in Angola’s lucrative oil and gas market.

    Despite delays caused by the impacts of the COVID-19 pandemic, Angolan authorities are advancing plans to construct three new refineries across three locations in the country. Namely, Soyo in northern Angola, in the exclave city of Cabinda and in the port city of Lobito. The Cabinda refinery project in Angola´s downstream sector is at an advanced stage with a capacity to process up to 60,000 bpd. These developments will address the disproportionate importation of refined products and also seek to position Angola as a major exporter of refined products and associated petrochemicals in the sub-region.

    Accordingly, there is an opportunity for international companies, some of which are already operating throughout Angola´s energy value chain, to work on new projects on their own or with state-owned Sonangol. This way, international companies can take advantage of the unique opportunities both in Angola and in the sub region, which includes major net importers of refined products like the Democratic Republic of Congo and Zambia. In this regard, TotalEnergies has already invested $100 million in its partnership with Sonangol to further expand the country´s fuel distribution network by building 50 new service stations.

    While Angola aims to complete the various refinery projects currently underway and create an attractive investment environment for new projects, the country also intends to progressively open up the downstream sector to serve as a catalyst to foster greater competition, stronger economic growth, and maximize the potential for new job creation as well as other socio-economic benefits.

    These and many other opportunities are expected to be in the spotlight at this year’s edition of Angola Oil and Gas, scheduled to be held on 29,30 November and the 1 December 2022. Angola Oil and Gas 2022 is the official conference of the Ministry of Mineral Resources, Petroleum and Gas of Angola ministry and will bring together stakeholders from Angola’s oil and gas industry, as well as global investors and services companies interested in opportunities in Angola.

    Distributed by APO Group on behalf of Energy Capital & Power.

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  • NNPC, AFREXIMBank, $5 Billion Funding For Oil & Gas Upstream Projects

    The African Export Import Bank (AFREXIM Bank) has committed $5 billion in corporate finance to the Nigerian National Petroleum Company Ltd to fund major investments in the country’s upstream sector.

    This fund raise is in response to President Muhammadu Buhari’s signing of the Petroleum Industry Act in August 2021, under which the NNPC was re-incorporated as a commercially oriented limited liability company. The $5 billion they raised will now allow them to acquire and operate producing oil and gas assets in Nigeria.

    The funding commitment was the result of a meeting between the NNPC Ltd team led by Group Managing Director/Chief Executive Officer Mele Kyari and the Chairman of the Board of Directors and President of the African Export-Import Bank (Afreximbank), Benedict Oramah, in Cairo, Egypt on Wednesday, according to several local and international sources sighted by NIPC Intelligence.

    According to the reports, NNPC and Afreximbank agreed to deepen their business collaboration, among other things.

    “The bank agreed to play a finance advisory and fundraising role in order to raise $5 billion for the “acquisition, investment, and operation of energy” producing assets in Nigeria as part of NNPC’s growth strategy following its incorporation as a limited liability company.”

    “Afreximbank will also underwrite $1 billion as part of the landmark transaction as part of the forward sales base trade finance transaction.”

    “The NNPC and Afreximbank also explored the innovative idea of establishing a pan-African Energy Transition Bank and agreed to collaborate toward achieving the goal,” according to the reports.

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  • Sasol to sell its indirect interest in the Escravos

    South African petrochemicals giant Sasol said on Wednesday it would sell its indirect interest in the Escravos gas-to-liquids (EGTL) plant in Nigeria to Chevron for an undisclosed sum.

    The world’s top manufacturer of motor fuel from coal said it would continue to support Chevron in the performance of the EGTL plant through ongoing catalyst supply, technology and technical assistance.

    The company said other sale processes, including its interests in the Republic of Mozambique Pipeline Investment Company pipeline and Central Termica de Ressano Garcia gas-fired power plant in Mozambique, are well underway.

    In March, Sasol had accelerated its asset disposal programme and said that it could sell up to $2 billion of its shares to ensure that it can pay its debt following a slump in oil prices and fears over the coronavirus outbreak.

    The project was 76% complete by June 2011. The Escravos site is located about 100km south-east of the Nigerian capital Lagos. The plant receives gas from Chevron-operated Escravos Gas Plant (EGP).

    Escravos gas-to-liquids (EGTL) plant design and development

    “Sasol Chevron is providing the project with the leading technologies of the two companies, Sasol’s proprietary Fischer-Tropsch technology and Chevron’s Isocracking technology.”
    With EGTL as the first project using its technology and technical expertise, Sasol Chevron (a joint venture between Sasol and Chevron) worked on the design and development of EGTL and is providing management, operating and technical services to the project owners. Sasol Chevron will also market products from EGTL.

    The $8.4bn EGTL project is an integral part of the owner’s overall gas use strategy which includes domestic natural gas sales, regional natural gas sales through the West Africa Gas Pipeline (WAGP) and international sales of GTL products.

    The initial estimated cost of the project was revised twice and reached $5.9bn from an initial $1.7bn. New estimates say the project will now cost $8.4bn. Due to the delays and increases in costs, the project is now expected to be completed in 2012 and will be operational in 2013.

    The GTL plant converts natural gas into premium environmentally friendly fuel, diesel and GTL naphtha products. Europe is the primary market for all fuel products from the Nigerian plant, although some products are sold in the USA.

    Although the project is situated in a politically sensitive area, both Chevron and Sasol are confident about bringing the project to fruition by 2012.

    Sasol and Chevron sent 200 Nigerians to South Africa on a 26-month training course at Sasol’s plants in Secunda and Sasolburg.

    Sasol Chevron’s Fischer-Tropsch and Isocracking technologies

    Sasol Chevron provided the project with the leading technologies of the two companies, Sasol’s proprietary Fischer-Tropsch technology and Chevron’s proprietary Isocracking technology.

    Sasol is a recognised leader in state-of-the-art Fischer-Tropsch technology and has been actively involved in developing technology for more than 50 years. The Isocracking process is used to upgrade waxy syncrude to yield a lighter premium-grade fuel which contains no sulphur or aromatics.

    Conversion of natural gas to diesel at the Nigerian Escravos GTL facility

    The Escravos GTL project converts more than 325 million cubic feet of natural gas a day to GTL diesel and GTL naphtha. The GTL plant is located adjacent to the CNL Escravos Gas Plant – phase I (EGP-1).

    This plant processes about 150 million cubic feet of gas each day and produces LPG for sales to international markets and pipeline quality gas for domestic uses.

    The EGP-1 project, which cost $550m, was completed in 1997. EGP-2 came on-stream in 2003 and phase 3A was completed in 2009. The EGP project is currently in phase 3B of expansion. It is expected to be operational in 2013.

    Feasibility studies for CNL and NNPC’s EGTL project

    A pre-feasibility study in April 1998 started the ball rolling for the EGTL project; this was followed by a more in-depth engineering feasibility study to confirm the design configuration and economics.

    After the successful completion of the feasibility study, EGTL entered with front-end engineering and design (FEED) in July 2001. This was completed in 2002. The project was executed under a lump-sum engineering, procurement and construction contracting strategy and first production is expected in 2013.

    The environmental impact and socio-economic assessments were completed and project-critical path site preparation activities commenced in early 2002.

    EPC contracts awarded to African and international companies

    In April 2005 the NNPC awarded the contract for the EGTL project to a consortium consisting of JGC of Japan, Kellogg, Brown and Root (KBR) of the USA and Snamprogetti of Italy.

    “The Escravos site is located about 100km south-east of the Nigerian capital Lagos. The plant will receive gas from Chevron-operated Escravos Gas Plant (EGP).”
    The GTL plant is designed to process GTL products like low-sulphur GTL diesel, GTL naphtha and liquefied petroleum gas (LPG), thus eliminating the high incidence of gas flaring in Chevron Texaco’s area of operation.

    Another key area of the contract involved the construction of a mini refinery, used for fuelling boats, helicopters, fixed-wing aircraft, drilling rigs and onshore/offshore facilities.

    The mini refinery also services floating petroleum filling stations to be introduced in the Niger Delta region. Julius Berger Nigeria completed construction of the initial six floating stations under a contract received in 2005.

    Acergy secured a $500m contract for gas development plan of the project in October 2009. The contract includes engineering, fabrication, procurement, transportation, installation, tie-in and commissioning of the plant. It covered the procurement and installation of pipelines of about 130km length and assembly, along with the installation of 15 risers.

    The contract also included the installation of three subsea tie-ins and 40 crossings.

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