Page 5 - AfrOil Week 26 2022

AfrOil COMMENTARY AfrOil

The plant is now operated by a consortium that Currently, there is no other facility in the
includes subsidiaries of Chevron (US), BP (UK), country capable of liquefying or otherwise treat-
Eni (Italy), TotalEnergies (France) and Sonan- ing gas.
gol, the national oil company (NOC) of Angola,
and it is capable of turning out 5.2mn tonnes per Beyond Angola LNG – eventually
year (tpy) of LNG at its single production train. The government does appear to have broader
Most of Angola LNG’s feedstock is associated long-term ambitions for gas beyond Angola
gas from offshore fields that are being developed LNG.
by its shareholders. However, the facility also Barroso told MPs on June 23 that Luanda
processes natural gas from a number of offshore hoped to use NGC’s production to supply gas
deposits. to domestic consumers and achieve self-suf- Angola does
ficiency in LPG production. Gas also has the
Different tax regimes potential to serve as feedstock for petrochem- have certain
Under Angola’s current tax laws, there is a dif- ical and fertiliser plants and as a source of fuel
ference in the way these two production streams for industrial facilities and thermal power plants incentives right
are treated. (TPPs), he said. In turn, he added, all of these ow to focus on
More specifically, Angola LNG currently industries and enterprises are likely to have a
receives associated gas for free, with no tax knock-on effect, creating more jobs and attract- ensuring the LNG
charged. However, it must purchase natural gas ing more investments in related sectors of the
from the producer – that is, from the company Angolan economy. plant’s access to
or companies that operate the field where the gas For the moment, though, the government
originated – and pay a tax on it. appears to be more focused on Angola LNG. feedstock
This policy puts natural gas suppliers at an This may be because it has not yet taken all the
obvious disadvantage, as it makes their feed- steps (or raised the money) necessary to realise
stock far less competitive than associated gas. As its ambitions with respect to the development of
such, it has the potential to hamper the govern- a more extensive value chain, but it may also be
ment’s efforts to promote the development of the related to the fact that world gas markets are cur-
country’s natural gas resources by reducing its rently in turmoil because of increased European
attractiveness to a major local consumer of gas. demand.
And for the foreseeable future, Angola LNG In other words, Angola does have certain
will be central to those efforts. As Barroso noted incentives right now to focus on looking for
on June 23, Luanda has made the gas liquefac- ways to bolster the gas sector and ensure the
tion plant a key component of its gas devel- LNG plant’s access to feedstock in order to guard
opment plan by obligating NGC to sell future its ability to serve European markets in the wake
production from the Kiluma, Maboqueiro, of Russia’s invasion of Europe. But it will also
Enguia Norte, Atum and Polvo fields to the have to invest in local capacity if it wants to make
Angola LNG consortium for processing and the shift from export-oriented gas operations to
export. domestic gasification. ™

The Angola LNG plant receives associated gas free of charge (Photo: Bechtel)

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