Page 7 - DMEA Week 01 2021

DMEA COMMENTARY DMEA

train, and BP (UK) has agreed to purchase all of NFE, by contrast, has only reached the point of
its output within the framework of a long-term signing an MoU and is not ready to make any
agreement. formal commitments.
It’s worth noting, though, that there is another
Mauritania energy hub significant difference between these projects.
Meanwhile, NFE is looking to develop an LNG Coral South LNG is something of a vertically
plant offshore Mauritania as part of a planned integrated endeavour, as the Eni-led consortium
energy hub. is directing and funding the effort to monetise
In a press release dated December 21, the Area 4 from top to bottom – by extracting the
company reported that it had signed a non-bind- gas, processing it into LNG and loading onto
ing memorandum of understanding (MoU) with tankers for exports.
Mauritania’s government on the establishment NFE, by contrast, is coming from a different
of an offshore facility capable of using existing angle. It is not looking to invest in upstream
gas reserves as feedstock for the production of exploration and development. Instead, it is
LNG, blue ammonia and electric power. making its technology and capabilities available
It did not say whether it had identified a to firms that are working at existing gas deposits
source of gas for the proposed energy hub, but and aims to give them an economical means of
it did note that the facility would be able to turning their production into LNG, ammonia,
deliver gas to two power-generating facilities in electricity or (presumably) pipeline shipments to
Mauritania. onshore customers.
One of these, the 180-MW Somoelec thermal The difference between these two approaches
power plant (TPP) is already in existence, and is illustrative of a broader change in the LNG
the other, a new 120-MW combined-cycle TPP, sector. LNG was initially perceived as a relatively
is slated for construction, it explained. inflexible and cumbersome commodity, best
NFE further stated that the facility would suited to long-term, large-scale contracts han-
make use of its “Fast LNG” technology, which dled by major players with the widest possible
uses modular units to establish midsize gas liq- range of in-house capabilities.
uefaction plants in conjunction with jack-up rigs Over time, though, the market has become
or other types of floating infrastructure. more open and flexible, with room for smaller
This method will allow the partners “to pro- players, more varied types of contracts and more
duce LNG in the Atlantic coastal basin offshore specialised service providers.
Mauritania for local gas and power markets as Hence the difference between Coral South
well as international exports,” it said in its press LNG and NFE’s proposal for Mauritania. Eni
release. It can also be deployed more rapidly and and its partners are a bit closer to the older pat-
cheaply than existing FLNG solutions, the com- tern, in which everything is handled by the con-
pany added. sortium’s operator and its chosen contractors,
whereas NFE almost appears to be talking about
Different approaches offering gas liquefaction as a service.
These two projects are, of course, at very different If current trends persist, there may be more
stages of development. companies that take a similar approach in the
Coral South LNG is gearing up to start future, treating LNG as a more flexible (and
commercial production later this year and has smaller-scale) commodity than Coral South
already spent a significant amount of money. LNG and other large consortia have done.™

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