Page 16 - AfrOil Week 20 2020
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PROJECTS & COMPANIES
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It produces up to 22.5mn tonnes per year (tpy) of the super-cooled gas, placing the country among the top five LNG producers in the world. The group launched its sixth train more than a decade ago, and its seventh was originally due to come on stream in 2018. A final investment decision (FID) on the project was finally taken in December, and NLNG went on to finalise offtake deals, including with Total and Eni.
The unit will be able to turn out up to 4.2mn tpy of LNG, while the debottlenecking of exist- ing trains will add a further 3.4mn tpy. This will bring the plant’s production up by a total of 35%.
“The construction phase of Train 7 can now commence in earnest,” Nigerian Petroleum Minister Timipre Sylva said during an online event on May 13.
Conditions met
Shell issued a statement saying that all con- ditions for the December FID had now been met, including “a formal commitment from the organisations providing financing for the pro- ject.”ConstructionisduetobefundedbyNLNG without shareholder loans or shareholder equity requirements.
‘‘We are happy with the progress NLNG has made over the years and its enormous
contributions to the Nigerian economy,” Shell’s country chair in Nigeria Osagie Okunbor com- mented. “The EPC awards for Train 7 is good news for Nigeria with the potential to bring more export revenues, unlock new projects, and attract foreign direct investments [FDIs], in addition to transforming the economy of the Niger Delta and Nigeria as whole.”
`Train 7 is due to start up in 2025, by which point NLNG is hoping that the market will have recovered. Investments will also help the Nige- rian economy get back on a growth trajectory. “Unless projects like this go on, the economy will not improve,” Sylva said.
The NLNG consortium includes four shareholders: Nigeria National Petroleum Corp. (NNPC), with 49%; Royal Dutch Shell (UK-Netherlands), with 25.6%; Total, with 15%, and Eni, with 10.4%. The group began operat- ing in 1989 and has already built six production trains at its gas liquefaction plant on Bonny Island. The Nigerian government has said before that NLNG could eventually have as many as 12 trainsinoperation.
The expansion project is moving forward at a time when the global LNG industry is oversup- plied, as coronavirus (COVID-19) lockdowns continue to weigh down on gas demand.
South African oil storage capacity draws interest from US companies
SOUTH AFRICA
US crude oil producers are reportedly showing interest in storage capacity in South Africa.
Between March 1 and April 31, tankers car- rying nearly 6mn barrels of US-produced oil departed from the US Gulf Coast (USGC) and headed to South Africa. The US Census Bureau has released data showing that 2.14mn barrels of US-produced crude was exported to South Africa in the month of March. And according to preliminary vessel-tracking data compiled by Argus Media, at least five ships carrying 3.74mn barrels of crude left the USGC in the month of April and were slated to off-load at a new tank farm in the Saldanha Bay Industrial Develop- ment Zone (SBIDZ).
These shipments mark the first large-scale movement of crude from the US to South Africa. US government data show that only three tankers plied this route before March 2020 – one carrying a 500,000-barrel cargo in July 2017, one carrying a 320,000-barrel cargo in July 2019 and one carrying a 320,000-barrel cargo in October 2019.
The Saldanha Bay storage facility is operated by a South African company, Oiltanking MOGS Saldanha.
The depot already has four working tanks, each with a capacity of 1.1mn barrels, and hopes to bring five more online in the third quarter of this year. It may eventually have a total of 12 tanks with a combined capacity of 13.2mn barrels.
US companies are probably taking more interest in the Saldanha Bay depot because they do not have access to adequate storage capac- ity closer to home. The spread of the corona- virus (COVID-19) pandemic has led to sharp declines in energy demand, and US storage facilities have not been able to accommodate all of the producers and traders that are saddled with excess supplies of oil.
But there may be another factor at work. According to Argus Media, the new storage auctions that Matrix Global Holdings has devel- oped for Oiltanking MOGS Saldanha may have drawn US firms to South Africa.
Matrix has yet to reveal details of the out- come of these auctions, but Argus noted that the company’s previous auctions for capacity in the sour crude oil caverns of the Louisiana Offshore Oil Port (LOOP) and in facilities at Cushing, Oklahoma, have been quite successful.
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Week 20 20•May•2020
