In South Africa, Renergen to become pillar of new global helium spot market

On Monday, natural gas and helium producer Renergen announced the completion of a helium forward sale agreement for 100,000 units over a period of 19 years. Each unit represents a thousand standard cubic feet (mcf) of helium at 99.999% purity and in liquid form and weights 4.7kg (37.5 litres when in liquid form).

The units will be sold to Argonon Helium US Inc, a newly incorporated American helium trading company in Delaware. Argonon’s vision is to use these helium units to establish a spot market for helium.

“Unlike other more transparent commodities, helium is not presently traded in the spot market and a visible price per mcf is not available. The collaboration between Renergen and Argonon is specifically designed to bring transparency of pricing into the helium market and highlight the growing global importance of helium,” Renergen said in a statement.

The helium will be coming from Renergen’s Virginia Gas Project onshore South Africa. This is where Renergen’s subsidiary Tetra4 is developing the country’s first and only onshore petroleum production right to become the first liquefied natural gas (LNG) and helium producer in the country.

The company already began producing small quantities of compressed natural gas (CNG) in 2016, which it supplies to the transport and logistics industry. The Virginia Gas Project is the next major phase of development, targeting the production of LNG and helium by the end 2021 by developing total proved (1P) methane reserves of 40.76 billion cubic feet (Bcf) and 1P helium reserves of 1.01 Bcf.

Its Phase 1 consists in significant infrastructure expansion with a new scalable gas plant and pipeline, and a maximum production target of 74.6 million cubic feet per day (MMcfd) (about 350kg) of liquid helium and 2,700 GJ (50 tons) of LNG. Upon start of production, Renergen will become South Africa’s first distributor of LNG at filling stations through its partnership with French major TotalEnergies, and the country’s only domestic producer of helium.

But the recent deal with Argonon further paves the way for the second phase of development at Virginia. With proved and probable (2P) reserves of methane estimated at 138.99Bcf and of helium estimated at 3.41 Bcf, the project has significant growth potential.

As a result, Phase 2 is expected to follow by Q4 2023, further increasing LNG production to meet an anticipated increase in demand and provide LNG supplies across all major highways in South Africa.

Key contracts for phase 2 were awarded in early 2021, including the FEED studies, and the final investment decision (FID) is expected to be taken once these are completed. Phase 2 is designed to allow Renergen to produce significantly larger quantities of LNG and liquid helium.

Future helium’s production will be further supported by gas strikes in March 2021 at the POO7 and MDR1 wells: the former returned a helium concentration of 4.38% while the latter returned a helium concentration of 3.15%.

Renergen’s recent deal with Argonon gives it potential pre-funded helium sales from Phase 2 of up to $25m and a portion of these funds would be used to accelerate Phase 2 of drilling without the need for an equity issue.

Full details on the Virginia Gas Project are available in the “Projects” section within your Hawilti+ research terminal.

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TechnipFMC sees $3bn of subsea opportunities in Africa within 24 months

TechnipFMC sees subsea opportunities across Nigeria and Angola totaling between $3bn and $5bn within the next 24 months, the company said during its Q3 2021 earnings conference call. This remains in line with its previous estimate released at the end of Q2. Angola to the front The subsea market in the region will be heavily driven by TotalEnergies’ projects in Angola. These notably include the development of the Begonia (Block 17/06) and Cameia (Block 21) fields, with subsea projects values of at least $250m for both. Block 21 is notably the location of one of TotalEnergies’ future production hubs with the pre-FEED for a new floating, production, storage and offloading (FPSO) unit awarded to Yinson earlier this year. Future subsea projects by TotalEnergies in Angola also include the execution of two subsea tieback projects on producing blocks: Cravo, Lirio, Orquidea and Violeta (CLOV) Phase 3 on Block 17 and the ACCE project on Block 31 (an acronym for the Alho, Cominhos and Cominhos East fields). The latter is expected to be the biggest of the pack, with a value of $500m to $1bn. Block 17 has been subject to significant subsea activity recently, with the commissioning of Zinia 2 earlier this year and the ongoing execution of Dalia 3 and CLOV 2. Hawilti’s own research sourced from the Hawilti+ research terminal further shows that Angola will be remaining sub-Saharan Africa’s biggest subsea market in the medium-term. In July 2021, Italian major Eni notably requested expressions of interest for the Agogo full field development on Block 15/06, including the provision of an FPSO system. “Several new production hubs are in the making offshore Angola while producing blocks have received a series of incentives to develop marginal and satellite fields,” said Mickael Vogel, Head of Research at Hawilti. “Infrastructure-led exploration has also proven a very successful strategy in the country and is expected to continue, especially in Block 15/06 and Block 17.” A possible recovery in Nigeria Meanwhile, TechnipFMC sees two projects moving forward in Nigeria that could support the subsea market in the country. One is the development of the Preowei field on OML 130, operated by TotalEnergies and whose field development plan has been approved since 2019. The other one is further development of the Shell-operated Bonga asset on OML 118. In May 2021, new agreements were executed for OML 118 between the NNPC and contractor parties SNEPCo (Shell), ExxonMobil, Total and NAOC (Eni). However, a big question at the moment remains what future Bonga development project will be approved first: Bonga North or Bonga South-West/Aparo. Full details on ongoing and future projects offshore Angola and Nigeria are available in the “Projects” section within your Hawilti+ research terminal.

BW Energy starts production from Tortue Phase 2 offshore Gabon

BW Energy has announced that the hook-up of the DTM-6H and DTM-7H production wells at its Dussafu Marin Permit offshore Gabon has been completed and handover to production operations made. DTM-7H (Gamba formation) was brought online yesterday, while DTM-6H (Dentale formation) is expected online in the coming days. Both wells form part of the four additional production wells drilled as part of the Tortue Phase 2 project and tied-back to the FPSO BW Adolo. Out of these four wells, DTMH-4 and DTMH-5 had already been brought on stream in early 2020 and are producing. However, DTMH-6 and DTMH-7 formed part of a second cluster initially scheduled for completion in June 2020 but delayed because of the Covid19 pandemic. Drilling resumed only in April 2021 while gross projected investment forecast for Tortue Phase 2 had to be cut from $275m to $238m. “The Tortue Phase 2 development was completed below budget and within the revised timeframe. We look forward to the production growth following first oil from the two wells. Operationally we will now focus on stabilisation of the production and wrapping up the project activities.” Carl K. Arnet, the CEO of BW Energy Gross production averaged about 9,000 barrels of oil per day (bopd) in Q3 2021 and currently stands at 11,500 bopd. Source: BW Energy In parallel to the completion of Tortue Phase 2, BW Energy is preparing to execute a third development phase with the Ruche Phase 1 project. It targets the Hibiscus and Ruche Fields located 20km northwest of the Tortue Field via the drilling of up to six horizontal production wells connected to a fixed wellhead platform, itself tied back to the existing BW Adolo FPSO. The drilling is expected to be split into four wells in the Hibiscus Field and two wells in the Ruche Field, all targeting the Gamba reservoir. Full details on the development of the Dussafu Marin PSC are available in the “Projects” section within your Hawilti+ research terminal.