Page 6 - AfrOil Week 06 2022

AfrOil COMMENTARY AfrOil

Long-term solutions commercialised, though, and its reserves, which
Meanwhile, the African Energy Chamber (AEC) amount to at least 37bn cubic metres, have
lauded Shell for its willingness to plan and move remained stranded.
forward with preparations for deepwater explo- Now the question is whether fresh explora-
ration at a time when the coronavirus (COVID- tion will uncover reserves large enough to war-
19) pandemic was raising questions about the rant further development. Kudu has thus far
economics of such projects. “Credit is due to been left idle because it was not large enough to
Shell and partners for sticking with their drill- develop in isolation and also because Namibia’s
ing campaign in an environment where frontier domestic energy market was not large enough
exploration drilling fell to the lowest level ever to attract investment in a stand-alone gas-to-
recorded in Africa,” said NJ Ayuk, the chamber’s power (GTP) project. This might not be the
executive chairman. case for Graff-1, however – especially if further
Ayuk continued: “Many majors have not had exploration uncovers additional reserves.
a long-term approach; rather, they have instead If so, Shell and other IOCs will need to start
focused on quicker return. Shell has shown resil- thinking about how to commercialise their dis-
ience and commitment to Namibia, which is a coveries. If they find more oil, they may need to
good thing. The resource is large, the unit cost look into developing their fields with floating
for producing in Namibia should not be too production, storage and off-loading (FPSO)
high, and I am confident Shell has the skillset vessels that can also fill tankers for export. And
and technology to operate this field in a low-car- if they find large amounts of gas mixed in with
bon environment.” oil, they may need to consider an LNG project –
It is worth noting, however, that Namibia’s or reconsider the GTP option and target South
potential has been known – and neglected – for Africa’s undersupplied electricity market, as well
a long time. Large volumes of gas were found at as domestic consumers.
Kudu, a field in the Orange Basin that lies north- Even so, it may take more than four years for
east of PEL 39, in 1974. The field has never been these solutions to reach full capacity. ™

PIPELINES & TRANSPORT
Spain says Morocco can use

GME pipeline to import LNG

MOROCCO MOROCCO has secured permission to use to growing political tensions between the two
Spanish facilities as a means of importing LNG neighbours.
indirectly, Bloomberg reported last week. Morocco was expected to face difficulties in
After more than two months of talks, Madrid meeting its LNG needs due to its price, and due
finally gave the green light to proposals for to the fact that the country does not have a float-
allowing Morocco to use the Gaz Maghreb-Eu- ing terminal to import LNG. ™
rope (GME) pipeline to purchase natural gas
from international markets. This arrangement
will allow Morocco, which lacks the infrastruc-
ture needed to import LNG directly, to purchase
LNG and have it delivered to Spain by tanker for
regasification and transferred to GME for trans-
port across the Mediterranean via the GME link.
It hinges on a co-operation agreement between
Morocco and Spanish operator Enagas.
The government opened a bid for LNG trad-
ers and intends to sign a five-year contract for
the deal, said Leila Benali, Energy Transition and
Sustainable Development Minister.
Spain has about a third of Europe’s total
regasification capacity. Morocco, meanwhile,
has found itself short of gas since Algeria halted
supplies on November 1, 2021. The Alge-
rian national oil company (NOC) Sonatrach
had been supplying gas to Morocco under a
long-term agreement that expired at the end
of last November and did not renew it, owing GME was built to pump Algerian gas to Morocco and Spain (Image: Wikimedia)

P6 www. NEWSBASE .com Week 06 09•February•2022