Page 14 - AfrOil Week 16 2021

AfrOil PROJECTS & COMPANIES AfrOil

Earlier this month, Hassan urged the Ministry Norwegian major wrote the book value of the
of Energy and Minerals to bring negotiations project down by $982mn, saying that its break-
on the $30bn LNG project to a close as quickly even price was likely too high to be profitable.
as possible. She also instructed the ministry to It has stopped short of abandoning the scheme,
determine whether Tanzania LNG was facing though, and says it may resume work at a later
any specific obstacles, saying: “It is time to know time.
if the project is viable or not and understand Meanwhile, the project is running far behind
who is blocking it.” schedule. Tanzanian officials had previously said
The president was quoted as saying that they hoped to sign a host government agreement
these measures would allow her administra- (HGA) with Shell and Equinor in 2019, and this
tion to decide whether to continue working would have allowed the two majors to begin
with Equinor and Shell or to look for another work in 2022. However, these deadlines were
partner. “If the existing investors are not willing, not met, partly because of commercial disputes
then you [the ministry] must find others,” she between the companies and the government,
remarked. partly because of Magufuli’s push to review the
The Tanzania LNG scheme envisions the production-sharing regime and partly because
construction of a gas plant with two or three liq- the Magufuli administration regarded the East
uefaction trains in Lindi, a coastal town in the Africa Crude Oil Pipeline (EACOP) project as
south-eastern part of the country. The facility a higher priority.
would use gas from three deepwater offshore According to Ottoy and Grootendorst, these
sites containing about 35 trillion cubic feet delays have narrowed the window for develop-
(991bn cubic metres) – Block 2, assigned to ment of the offshore gas reserves. “Timing is
Equinor, and Blocks 1 and 4, assigned to Shell – critical in terms of the project’s success,” they
as feedstock for LNG production. wrote in the editorial. “A mega-project like this
Equinor has expressed scepticism about the takes years to plan, design and execute, and
viability of Tanzania LNG. Earlier this year, the hence, critical decisions are required now.” ™

Nigeria’s DPR publishes list

of private refining licences

NIGERIA NIGERIA’S Department of Petroleum unit developed by Waltersmith Petroman at
Resources (DPR) published a list of valid operat- Ibigwe in operation.
ing permits for private refineries in the country The relative low cost and convenience of
last week. modular refineries has made them attractive in
Publication of the list, which includes the Nigeria. These projects allow field developers
650,000 barrel per day (bpd) facility being devel- to process crude close to the wellhead, thereby
oped by Dangote Group at Lekki, led to conster- avoiding pipeline breaches, theft and illegal
nation in the local press over the omission of 32 refining while controlling sales in the local
licences, leading to claims that DPR had revoked market and also improving relations with host
these permits, forcing the organisation to clarify communities.
that these licences had actually expired. Even so, Nigeria’s track record in bring-
Paul Osu, DPR’s head of public affairs, said ing such projects to fruition indicates that the
that permits not included in the published list chances of this projected capacity rise being fully
had expired: “Refinery licences, like our other realised are almost zero. However, the progress
regulatory instruments, have validity periods shown by the modular units is a shot in the arm
for investors to attain certain milestones. This for the sector and provides major encourage-
implies that after the validity period for the par- ment for the development and expansion of
ticular milestone, the licence becomes inactive Nigeria’s downstream industry.
until the company reapplies for revalidation to Speaking to AfrOil, Ian Simm, principal
migrate to another milestone.” advisor at consultancy IGM Energy, said: “It
Of the 23 valid licences, construction has might not sound like much, but achieving con-
only begun on five plants, four of which are struction completion at 23,000 bpd of refining
modular units with a nameplate design capac- capacity is a major step forward for Nigeria’s
ity of 5,000-7,000 bpd, the other being Dangote. refining sector. The Dangote unit is clearly the
Also, 16 of the permits are for refineries with a one everyone is waiting for, but companies like
capacity of 12,000 bpd. Waltersmith have started the ball rolling on an
The valid permits envision 1.09mn new bpd approach that sets achievable targets and brings
of capacity, with only the 5,000 bpd modular tangible benefits for the local communities.” ™

P14 www. NEWSBASE .com Week 16 21•April•2021