Page 12 - DMEA Week 09 2020

DMEA TRANSPORT DMEA
FID on Qatari LNG expansion unlikely this year: Rystad
QATAR
The global LNG market is reeling in oversupply.
QATAR is unlikely to sanction the expansion of its giant North Field LNG project this year, Oslo- based Rystad Energy said in a recent research note, in light of the collapse in gas prices.
The world’s top LNG exporter plans to raise its liquefaction capacity from 77mn tonnes per year at present to 126mn tpy by 2027, According to Rys- tad, this project is likely to cost more than $50bn in greenfield investments at the North Field.
Qatar had planned to take a final investment decision (FID) on the project’s first $35bn stage this year, but Rystad does not expect this mile- stone to be reached until the first half of 2021. Its operator Qatar Petroleum is now re-evaluating the expansion’s commercial outlook, the consul- tancy said, owing to low gas prices. The commer- cial bid deadline for the liquefaction facilities had also been extended to the second quarter of 2020.
“Given the anticipated delays in formal sanc- tioning of the project, Rystad Energy has low- ered its total forecast for capital expenditure in the Middle East, predicting about $21.3bn of investments will get the go-ahead in the region
this year, versus the previous estimate of more than $56bn,” Rystad said.
The expansion’s first phase comprises con- tracts for associated onshore liquefaction and storage facilities. Contractors are to be sought for building four LNG trains, utilities and offsite facilities, a helium recovery unit, non-technical buildings, warehouses, workshops, and associ- ated facilities. Qatar is likely to take an FID on the second stage of the expansion in 2023, at the earliest.
The global LNG market was oversupplied last year as a result of lacklustre gas demand in Asia and a surge in LNG production in the US and other countries. Making matters worse for pro- ducers, the coronavirus outbreak has resulted in weaker gas demand in China, the world’s biggest LNG importer.
Rystad also expects FIDs this year on $12.5bn of gas projects in the UAE, and the delayed Zuluf oilfield expansion in Saudi Arabia, which is tar- geting around 5bn barrels of oil equivalent and is slated to cost $10bn. ™
Eni finishes gas pipeline in Algeria’s Berkine Basin
ALGERIA
Th pipeline will result in a ramp-up in gas exports.
ITALY’S Eni has wrapped up construction work on a pipeline that will facilitate the export of natural gas and associated gas from hydrocar- bon fields in the Berkine Basin in south-eastern Algeria.
Eni said in a statement earlier this week that it had finished a 185-km pipeline that connects the Bir Rebaa Nord (BRN) field to the Menzel Ledjmet Est (MLE) field. The 16-inch (406-mm) pipe is capable of handling 7mn cubic metres per day of gas, it reported.
It also noted that it had worked with affiliates of Sonatrach, Algeria’s national oil company (NOC), to ensure that the link was built quickly. “This is an example of a ‘fast-track’ project, which saw a shared commitment by Eni and Sonatrach, based on a common strategy of an accelerated time to market and on the availabil- ity and ability of the contracting companies of the Sonatrach group to carry out the works,” the statement explained.
The Italian company intends to use the new pipeline for associated gas from BRN and Bir
Rebaa South-West (BRSW), both of which lie within Block 403. It began extracting gas from the BRN and BRSW oilfields in May of last year, and intends to move forward with development in 2020.
Eni will also use the link to carry natural gas from MLE and other fields within North Berkine. It has been working at the North Berkine gas fields since February 2019, when it signed a farm-in agreement for the Ourhoud II and Zemlet el Arbi sites.
The North Berkine fields will eventually yield 6.5 mcm per day of gas, as well as 10,000 barrels per day (bpd) of natural gas liquids (NGLs). This will be enough, in combination with production from the BRN and BRSW oilfields, to push out- put up to 65,000 barrels of oil equivalent per day (boepd) by 2020, Eni said.
The Italian company is one of the biggest investors in Algeria’s oil and gas sector. It has been active in the North African country since 1981, and its equity production there amounts to 90,000 boepd. ™
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w w w . N E W S B A S E . c o m Week 09 05•March•2020