Page 7 - DMEA Week 08 2022

DMEA
COMMENTAR
AfrOil COMMENTARY Y DMEA
AfrOil
More specifically, the company’s CEO, Claudio make an FLNG scheme of the type mentioned in
Descalzi, told analysts during a conference call the GMP a plausible option for future develop-
that Eni was fast-tracking a plan to establish ment. “Congo does have sufficient gas resources
two flexible, modular LNG production facilities to support a fairly small-scale FLNG project as
in the offshore zone. One of the facilities will well as supplying domestic needs,” he said.
be built near the shore and the other offshore, Additionally, Brazzaville has the support of
and both will process associated gas from fields Eni, the operator of Marine XII, the block that is
within the Marine XII block, he explained. described in the GMP as a “prime target” for the
Together, Descalzi added, the two units will FLNG scenario. This is a clear advantage, given
be able to turn out around 2mn tonnes per year that Eni is already a major investor in ROC’s
(tpy) of LNG. Eni hopes to begin production in offshore zone; the company is familiar with the
2023 and will sell Congolese LNG on the spot region’s geological, marine and climatic condi-
market, he added. tions, and it has established relationships with
multiple ROC officials and contractors. Eni’s fast-track
Brazzaville’s Gas Master Plan But there will also be challenges, including LNG plan is in
The Eni CEO did not comment on the cost of financial challenges. Thomson told NewsBase
this undertaking, name any potential partners that he expected the small-scale FLNG scheme line with the
or offer further details about his company’s envisioned by Brazzaville to be relatively costly.
intentions. He also said he expected that the price tag (and Republic of
It’s reasonable to assume, though, that Braz- the complexity) of this undertaking would only
zaville will support the Italian major’s plans. increase if ROC tried to bring any of the other Congo’s Gas
What Descalzi described is in line with the Gas international oil companies (IOCs) working in Master Plan
Master Plan (GMP) that the Congolese Ministry the offshore zone on board.
of Hydrocarbons drafted last year in co-opera- “[A] lot of the [gas] resource is in separate
tion with Wood Mackenzie, with guidance from blocks/fields, which would add complexity
state-owned Société Nationale des Pétroles du and require co-ordination with different oper-
Congo (SNPC). ators,” he explained. The need to bring multiple
Few features of the GMP have been made parties together is also likely to add to the time
public yet, as the Ministry of Hydrocarbons and expense of gas utilisation initiatives, he told
has indicated that it wants to wait until the NewsBase.
Congo International Energy Summit (CIES) He went on to say that it remained to be seen
takes place in Brazzaville in mid-June to reveal whether Brazzaville demonstrated the neces-
more information. However, the ministry has sary commitment to policy reform. This is not
stated that the GMP talks about making ROC the first time proposals for expanding the use
a gas exporter while also addressing the issue of of ROC’s gas resources have come up for dis-
domestic gasification. cussion, he noted, and the government still has
It has also offered some insights into the work to do with respect to introducing policies
approaches that Brazzaville is considering, as that draw investment to gas projects and shift
well as possible obstacles. For example, it has the focus away from oil.
declared that the government views floating “[The] project on Marine XII has been talked
LNG (FLNG) as an optimal means of launch- about for many years without tangible progress,”
ing gas exports – and that the Marine XII block he told NewsBase. “The value in Congo is still in
was a “prime target” for FLNG projects. Addi- oil, and without significant incentives, operators
tionally, it has acknowledged the relatively high will be reluctant to go after the gas.”
cost of FLNG solutions and has pointed out that Thomson did speak to NewsBase before Des-
changes in the policy regime would help make calzi’s announcement, and his statement may
gas projects more attractive to outside investors. turn out to be overly cautious.
Policy reform could also help ensure that the But his points are worth noting: While ROC
country retains its competitiveness and pricing does have gas (and quite a lot of it), monetisa-
stability, the ministry said. ROC is currently tion is not likely to be easy and the process of
ahead of other countries in the region with turning the country into a gas exporter may not
respect to establishing a supportive framework be simple. ™
for its domestic gas industry, as the success of
Eni’s current gas-to-power (GTP) initiatives
demonstrates, it commented.

Chances of success
The question now is how likely ROC is to realise
its ambition of becoming a gas exporter.
On the positive side, the country does
appear to have enough gas to support the kind
of initiative it is considering, according to David
Thomson, vice-president for sub-Saharan
Africa research at Welligence Energy Analyt-
ics. Thomson, who spoke to NewsBase shortly
before Descalzi’s statements about Eni’s plans,
described ROC’s reserves as large enough to Marine XII block (Image: NewAge)

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