Page 9 - DMEA Week 03 2020

DMEA TRANSPORT DMEA
Total signs 10-year supply deal with Nigeria LNG
NIGERIA
Nigeria wants to consolidate its position as a top-ranking LNG supplier.
FRANCE’S Total has struck a deal to buy 1.5mn tonnes per year (tpy) of LNG from the Nigeria LNG (NLNG) terminal on Bonny Island. Under the agreement, the volumes will be supplied to Total from trains 1, 2 and 3 of the Nigerian facil- ity. An NLNG spokeswoman told Reuters that deliveries were due to begin in October 2021. The LNG will be supplied on a delivered ex-ship (DES) and free on board (FOB) basis
The deal comes after the NLNG consortium – in which Total also holds a 15% stake – embarked on a push to remarket some of the volumes from the first three trains in 2018 as some of the early offtake deals for those trains came up for expiry.
According to the International Group of LNG Importers (GIIGNL), NLNG’s contracts with Turkey’s Botas, Portugal’s Galp Energia, Spain’s Naturgy and Total, covering a total of 2.67mn tpy, will expire in 2020 and 2021.
NLNG said in a statement that the deal with Total was in line with the consortium’s “drive to continue to deliver LNG globally in consolida- tion of its position as one of the top-ranking LNG
suppliers in the world”.
The latest offtake deal follows another agree-
ment that NLNG signed with commodity trader Vitol in December 2019 for the supply of 500,000 tpy of LNG over a 10-year period. These volumes will also comprise remarketed gas from trains 1, 2 and 3, with delivery on a DES basis, starting in October 2021.
NLNG has also been seeking buyers for vol- umes from Train 7, on which it made a final investment decision (FID) in December 2019, more than a year behind schedule. Start-up of the seventh train will push the consortium’s output capacity above 30mn tpy, up by 35% on the cur- rent level of 22.5mn tpy. According to Italy’s Eni, which owns 10.4% in NLNG, Train 7 itself will be able to turn out 4.2mn tpy, while the debottle- necking of existing trains will add another 3.4mn tpy.
Apart from Eni and Total, the other partners in NLNG are Nigerian National Petroleum Corp. (NNPC) with a 49% interest and Royal Dutch Shell with 25.6%. ™
REFINING
Uganda refining project nears FID
AFRICA
A decision will be taken once work has started on necessary infrastructure.
A consortium led by General Electric (GE) is near to taking a final investment decision (FID) on a $3.5bn refining project in Uganda, the East African country’s energy ministry has claimed.
The decision is due to be taken once work on an oil products pipeline and other infrastruc- ture that connect to the facility has commenced, the ministry said in a budget policy document published this week. The ministry is looking to secure UGX100bn ($27mn) in government funding for this infrastructure.
The Albertine Graben Refining Consortium (AGRC), comprising GE, Baker Hughes, Italy’s Saipem and Africa-focused investment funds YAATRA Africa and Lionworks Group, won a contract to build a 60,000 barrel per day (bpd) oil refinery in Uganda’s Hoima district in April 2018. The plant will initially operate at only half that capacity.
The group began front-end engineering design (FEED) work last March – expected to take 15 months to complete, according to the
budget document.
AGRC will operate the plant with a 60% stake,
while the government will hold the remaining 40% interest, with an option to sell shares to other East African Community states and insti- tutional investors.
Uganda, East Africa’s third-largest economy, found commercially viable crude reserves more than a decade ago, but production has been repeatedly delayed by disagreements with field operators over taxes and development strategy. A lack of infrastructure and domestic refining capability has also held up development.
First oil is now anticipated in 2022-2023, from fields jointly operated by France’s Total, China’s CNOOC and London-based Tullow Oil. The refinery’s launch will be timed to coincide with this milestone.
The refining project will allow Uganda to forgo fuels imports, and even position itself as a regional supplier. Earlier the energy ministry said it expected an FID to be taken in September 2020. ™
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